Alternative investment platform Mintos has released a limited supply of fractional bonds via originator IuteCredit.
The proceeds from the €10m (£8.5m) bond offer will be used to further diversify Mintos’ financing structure and to continue business development in new countries.
The yield to maturity (YTM) of the bonds for the initial listing is 12.488 per cent, with a coupon rate of 11 per cent. However, future listings for this fractional bond may be offered at a different YTM.
Read more: Mintos originator IuteCredit sees profits triple
Fractional bonds are offered at a discount, so the expected return for investors holding the investment until its maturity is higher than the coupon rate of the underlying bond.
Interest will be paid every six months in April and October, with a maturity date of 6 October 2026.
The initial offering significantly lowers the barrier to entry, enabling investments from as low as €50 (£42.70), while investors who wish to cash out early are able to do so on the Mintos secondary market.
Read more: Mintos ends 2023 on a high as supply fails to meet “surging demand”
Mintos expanded its offering last year from its core business of connecting investors with loan originators worldwide.
The European lending marketplace unveiled its fractional bond product in October last year, enabling investors to add corporate bonds to their portfolios.
In December, the firm launched a €20m fractional bonds offer from Latvian manufacturing firm iCotton that its investors can participate in with as little as €50.
Bonds are notoriously difficult for retail investors to access. They typically require investments in the five-digit range or higher.
Read more: Mintos launches in Italy and Spain