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Bond of the Week: 25 May 2018
Bond of the Week : 25 May 2018
New Retail Charity Bond - Belong 4.5% 2026
Please note that this article has been updated to correct some errors in the original
There is a new Retail Charity Bond. Here are the terms:
Those with a passing acquaintance of the national language of Vanuatu, Bislama, will know that belong is the most frequently occurring word. And they have a lot of villages. From there they may conclude that the charitable endeavour supported by this bond is the building of sustainable tree houses from which natives, vines tied round their ankles, can hurl themselves to land at the feet of Phil the Greek. [For further edification try Man Blong Mrs Queen]. However, those yet more familiar with Bislama will realise the issuer cannot be Vanuatuan or the charity would be Blong Vilej. The issuer of the RCB bond is in fact a Care Home provider from Crewe Junction.
Belong is not without entrepreneurial spirit and can spot a gap in the market. In West Didsbury, a short schlep away from Manchester, they have opened Belong Morris Feineymann, an Orthodox Jewish village; Latkes on Friday, Rabbi Kirsh and his wonderful wife Jackie on the Sabbath and schmaltz every other night of the week. I see it now; endless bespoke solutions - McTavish Tenements Glasgow (categ. economy) oats on Monday, oats on Tuesday, oats on …, pecuniary satisfaction for relatives assured. I could go on but the door bell has rung and I think it may be the hate police.
2013 2014 2015 2016 2017
Residents (average) 1,296 1,300 1,203 1,085 855
Revenue per resident 25,890 26,269 27,941 29,919 34,666
Note; The fall in the number of residents in 2017 is a result of the disposal of the last of the traditional homes.
Expenditure 31.85mil 30.103mil 26.99mil
Net income 7.3ml 2.9mil 15.1mil
Tangible assets 56.1mil 59.7mil 56.5mil
The villages are recognised at book value in the accounts (£56.5 million) but they have an (unofficial) approximate value of £80 million – a valuation was done for the banks a year ago. Borrowings (excluding this bond) are £30 million but net debt is £20.4 million – they have a reasonable amount of cash from the sale of their last (old model) homes. They have a pension deficit of £11 million. As with other charity bonds there is the important covenant that there must be asset cover of 1.3 X unencumbered tangible fixed assets to total unsecured debt (i.e. this bond). To be clear, by unencumbered it means assets on which there is no senior ranking bank debt.
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