with this rate of approval, you can accelerate the process and ask to close this poll in the next 12 hours.

go for it

Just for sake stating LL policy compliance, and the difference between a debt obligation offering and an equity offering.

Let's start with an equity offering:

An equity offering, is the most speculative one, since equity holders are absoultely last in line to claim a companys assets. To balance out this disadvantage they are at the advatage of having unlimited profit potential. In short the risk is highest here, but also the profit potential is best.

A bond offering, is less speculative than an equity offering, because bond holders are creditors and therefore have the right to claim a companys assets before equity holders. Bond holders still risk (just like equity holders) total loss of investment (100%, zero). To balance out this huge advantage bond holders have VS equity holders, bonds have a MAX-PROFIT: A bond will never pay more return than the predefined rate.

To put a more practical example, for february RA is estimated to make a profit of 4k L$, equity holders may receive all of the 4k through a divdidend or some of it or even none (as the management sees fit). While bondholders actually care less about the profitability their contract is that they will receive a payment of XX so long as the company has cash+liquidatable assets to pay off their obligation. (if there's no assets, then there's no bond payment, nor equity compensation neither, then we'd be bancrupt)

I hope that clearifies the confusion about bonds, stocks, and LL policies. This is not a deposit account, and there is no return on that deposit that doesnt exist. There is no direct guaranteed return, at all.

Last edited by AndyGrant (2010-02-05 01:34:17)

I posted this because this concern was raised by Bogart @ slcapex forums: http://slcapex.com/forums/topic/general/2839

As i said there, i have no problems adjusting the offering if indeed someone can point out how it violates the LL policy more than an equity offering. (i am flexible )

as you perfectly said, the bond is risking 100% of the investment and a bondholder knows that.

the deposits of old banks, was suposed to be secure investment, the first cash to payback in case of bankruptcy.

are very diferents cases.

i think the x% plus euribor will be good.

the last thing i remember from bogart is that he confuse a CDS with a CALL, and the call with a future and the future with an iron.

use yield 3% anual plus euribor.

you are a guy with a grat trackrecord, why pay 10% per year?

Let's have a discussion about this bond,

Bogart just posted the following argument which i think is fair:

it appoears that the language you've used is in effect promising a "rate of return" or could be construed as such. I'm fairly certain that's SPECIFICALLY what is prohibited by the LL policy. The potential problem lies in the fact that you've packaged it as a term investment with a predefined yield.

Are there others who view this like that, or who disagree ? If so why, or why not.

(as i said i have no rush with this, it's better that it's properly discussed, and debated than us risking that my inintial interpretaion of this offering and LL banking policy is wrong)

Well we can't use ANY predefined values, other than propably "core-inflation", because core inflation = zero rate of return, lol.

But i doubt anyone would lend RA money completely free of charge (except me).

The TOS is specific about predefined rate of return, and such, that's the part they dont like. They are more liberal when it comes to high-degree speculation (ie: sl stocks, insurance, derivatives... zyngo for example is a derivative, if you play well and you don't get teh devil in round 18 you do quiet well).

In other words they don't want us to give anyone the impression an investment is any safer than lending money to a random anonymous avatar in a random sim in sl. And, they dont want predefined ROI's.

I guess a variable rate with a min: 0% and a max x% would make sense. This would change the offering a lot, but would still be more attractive than a direct investment in the stock (due to higher prorirty in case of liquidation). PS: actualy the minimum = -100% (if everything fails).

lol the european opening is worst of what i expected....RA will sell me EDS of the CDS of Spain?

nice, all ibiza for you. I watched the first 10 sec of the video and I only saw guys.

Ok, from ibiza to the more serious issue,

The feedback i received in private is that the following text is the main concern:

IPO Price: 94.34
Maturity: 90 days after last IPO bond is sold
Amount of bonds to IPO: 1060 (gross proceeds L$ 100,000.00)
Payoff: Bonds will be liquidated at maturity at 100.00 L$ / bond, equivalent to an annual ROI of 24%.

Specifically the payoff part.

I'd like to ask especially those who voted no without specifying why, their view on this text and how it relates to LL banking policy, and if possible some suggestions how we can "modify" this offering to be more "compatible".

Last edited by AndyGrant (2010-02-05 05:19:43)

Ok, i think we have reached a conclusion, in RA's IPO poll, total of 18 votes were cast 100% in favour. This one has 10% more votes cast, but slightly lower approval rating (75%).

Also, none of the people who voted no have stated why, would be interesting to know why.

Unless there are any serious objections i'll submit the IPO application, and conclude this poll has passed in favour of RABOND being listed. (based on the updated prospectus of virtually "ZERO" return bond)

Last edited by AndyGrant (2010-02-05 11:43:49)