Second, the lending of the Company will be against appropriate collateral provided by the purchase of assets.
Third, an independent Security Trustee is appointed to act on behalf of Bondholders if the Company defaults. The Security Trustee acts solely on behalf of Bondholders.
This does not mean that investments are safe or guaranteed. Investors will only receive their investment back if the Company has assets to realise in the event of default.
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- Why do companies seek investment via a mini-bond rather than going direct to the banks or considering other forms of investment?