HOW IT WORKS

Finally, the senior secured and high yield corporate bond market is now accessible to the individual investor.

You no longer have to have millions to gain access to this exclusive asset class.

Here at WiseAlpha we are liberating this multi-trillion market for the masses so people can earn high quality fixed income by investing through our Notes and other WiseAlpha Products.

Getting started on our Notes Market

Open an account

Whether you want to invest as an individual or a company we offer an account that can fit your needs.

Add funds to your account

Transfer money into your account via debit card or bank transfer.

Select your investments

Choose individually or use Robowise to automatically diversify your money across different investments.

Receive interest income

A tiered Annual Service Fee is taken based on all amounts invested and taken only when interest payments are made.

Capital Returned

Receive your capital and accrued interest back at maturity or by selling your investments to another user. A 0.25% Sale Fee is applicable based on the principal amount of the investments that are sold.

Learn more about Corporate Bonds with our Guide to Earning income from Corporate Bonds

Remember our Notes (fractions of bonds) are investments, not savings or protected bank deposits. No FSCS cover. You are investing your money for a fixed term and your capital and interest are at risk. Bond values can also go up or down. Please make sure you read our FAQs below and our Risk Statement

The information presented here is for informational purposes only and is not investment advice, guidance, or a guarantee of the performance of any Note or portfolio and may not be relied upon. You should seek independent financial advice if you are unsure about whether WiseAlpha is suitable for you.

Features of Corporate Bonds

High quality borrowers

Completely established blue-chip companies with annual revenues of between £100m and several billion pounds

Comprehensive due diligence

Each bond structured by a global investment bank with due diligence carried out by leading UK accounting and law firms

Ownership

Typically publicly FTSE250 size companies or privately owned by large conglomerates, major private equity firms or pension funds

Institutional pricing and transparency

Interest coupons are priced by banks and institutional investors who take a detailed risk based approach. Borrowers usually publish public quarterly financials and audited annual results. Numerous information sources such as media coverage, company communications that investors can use to formulate their investment decisions.

Types of investment

SENIOR
SECURED BONDS

Corporate bonds issued by FTSE250 size companies which are sold over-the-counter in the international capital markets by global investment banks. Senior secured corporate bonds are the most secure piece of a company’s capital structure and have first priority and security over the company’s assets ahead of unsecured high yield or mezzanine debt and equity holders.

Interest payments

Interest every 6 months
Mainly fixed rates of cash interest, although some floating rate (Libor+coupon) bonds exist

Capital repayments

Capital paid back at maturity or if earlier can also be subject to a small price premium (an early repayment penalty above the face value of the bond)
Maturities tend to be 5-7 years from the point of issue

HIGH YIELD
UNSECURED BONDS

Corporate bonds issued by FTSE250 size companies which are sold over-the-counter in the international capital markets by global investment banks. Unsecured corporate bonds (high yield variety) are usually second ranking and subordinated to senior secured bonds or bank loans. This subordination creates greater risk for investors in the event of a borrower’s financial difficulties but the bonds are usually priced with a higher coupon relative to senior debt to compensate for this risk.

Interest payments

Interest every 6 months
Typically fixed rates of cash interest

Capital repayments

Capital paid back at maturity or if earlier subject to a price premium (an early repayment penalty above the face value of the bond) that is usually greater than for senior secured bonds. This can lead to greater price appreciation but also bigger price movements
Maturities tend to be between 7-10 years from the point of issue

*Typical borrow structure example

40%

20%

40%

Senior Debt

Junior Debt

Equity

Comparative Asset Class returns

Average annual interest rates^*

Please remember bonds are investments, not deposit protected savings. Your capital and interest are at risk.

Check out our risk summary

Historic returns across different financial instruments are provided for context only. The return you may make when investing on WiseAlpha may differ based on the investments or products you select and any applicable fees. Also, remember that past performance is not necessarily an indicator of returns for the future.

* Source: Data is correct as of 06/06/19, all figures displayed are Annualised Effective Rates. Data compiled from the Top 5 highest yielding products from moneyfacts.co.uk. Cash Instant Access ISAs are an average of the rates offered by Ipswich Building Society, Scottish Building Society, The AA, Leeds Building Society and Paragon Bank. 5 year fixed term bonds are an average of the rates offered by Secure Trust Bank, Paragon Bank, Atom Bank, Leeds Building Society and Charter Savings Bank. Equities data uses the annualised FTSE 100 Total Return Index 1998-2018. Sterling High Yield Bonds uses the BofAML Sterling High Yield Index 1998-2018.

Key FAQs

What is WiseAlpha?

We're the UK's leading digital bond market giving investors access to the world of corporate bonds. Our members can invest in well known British brand name companies via our Notes (which correspond to fractions of bonds) or through other WiseAlpha Products. Investors now have the ability to access one of the most attractive mainstream asset classes and are now able to build affordable and diversified portfolios. In this way WiseAlpha is leading the way in democratising what we believe is one of the best risk-adjusted asset classes.

What is WiseAlpha offering as an investment?

Members can invest in fractions of corporate bonds through our Note(s). Please note that references on the WiseAlpha platform to corporate bonds refer to our Notes (which correspond to fractions of bonds)

Our members can also use our Robowise automated investment service which diversifies their money across different Notes on the market and gives them the choice of two income portfolios: Balanced or Adventurous.

The Notes are issued by WiseAlpha Limited (BVI), which is a bankruptcy remote special purpose passthrough vehicle. WiseAlpha Technologies Limited (UK) promotes and arranges investments in the Notes. Only WiseAlpha Technologies is authorised and regulated by the Financial Conduct Authority (FRN:751087)

Members can also invest in our managed Smart Interest Bond product which offers different fixed rates for terms between 1, 3, 5 and 7 years. This product is also available for IF ISA and SIPP account holders. The Bonds are issued by WiseAlpha Investments (BVI) and promoted and arranged by WiseAlpha Technologies. Only WiseAlpha Technologies is authorised and regulated by the Financial Conduct Authority (FRN:751087).

Where is my money held?

WiseAlpha utilises the services of Global Custodial Services Limited (“GCS”) to provide a segregated custodial client account (held with Santander plc) for un-invested members' cash. GCS is authorised and regulated by the FCA to hold client money. WiseAlpha Limited, which issues the Notes (fractions of each bond) for our members to invest in holds the bonds it acquires with high grade global bank custodians in the same way as a fund.

Am I investing or am I lending?

As a member you are not 'lending' to a corporate borrower. Instead, you are investing in fractions of corporate bonds via our Notes which are further described here. It is important that you read the Risk Statement, Investor Agreement and FAQs before investing.

When investing in our Smart Interest bond product you are investing in a bond issued by WiseAlpha Investment Limited that invests the proceeds in a diversified portfolio of corporate bonds and Notes.

Can the value of my Notes go up or down?

Yes, bond prices can go up or down based on factors which may include financial performance by companies, interest rates, changes in the economy and special events e.g. Brexit or a number of other variables. WiseAlpha updates the prices of the bonds daily between 8am and 10am that correspond to each Note. It is important to bear in mind that while prices might fluctuate during its life, bonds are contractually required to repay at par (i.e. 100 or face value) so there is an expectancy of capital return which is not the case with equities. Therefore price fluctuations tend not to be as volatile.

What happens if a borrower defaults?

A default is when a bond issuer has not met one or more covenants or scheduled payments under its bond agreement. Usually a bond issuer will inform its investors prior to when a default happens that this may occur. In this instance the bond agreement is usually amended by consent of the required number of investors but in the event this does not happen and an issuer breaches a covenant or payment it will be in default and investors can enforce their security over the assets of the company.

WiseAlpha as holder of the underlying bond will vote on any amendments to bond agreement and update our Note holders with any changes to the economic terms of your Notes as a result.

What are the Fees and Taxation?

Our Fees are described further here.

Taxation

Interest from WiseAlpha Notes and WiseAlpha Investment Bonds is currently paid to investors without any tax being deducted.

Any income you earn from your investments in WiseAlpha Products forms part of your overall income and is subject to personal or corporation taxation rules. Interest payable to holders on money invested is charged to income tax in the tax year the interest is received. For example, interest received on 31 December 2018 is received in and taxable for the tax year 2018/19.

You should declare any interest and capital gains to the HM Revenue & Customs on a self-assessment tax return if you are an individual or inform your local tax office. If you are in any doubt about your tax position you should seek independent tax advice.

How do I access my Money?

Members wishing to sell their investments prior to their maturity dates can do so by creating a sell order on the Market page or relevant product page. Liquidity on our secondary market is dependent on there being an available and willing buyer at the market price. You will receive your cash in your account once another member has purchased the investments you are selling. To date everyone who has wanted to sell their investments has been able to do so. However, liquidity is not guaranteed.

WiseAlpha charges a 0.25% discount ("Sale Fee") to the prevailing market price on the amounts sold.

HOW IT WORKS