Hi Rixter.Rixter said:Not correct.. Your intial principle is returned to you less the difference between your LOC interest rate & CB interest retrun rate.
You are obviously very knowledgable on the subject of cashbonds and I am not (i.e have never used them), but the way they were explained to me was that after the 5 year period (in the example of $100K over 5 years), you have exhausted your LOC i.e drawn down the $100K, to service other loan/s. The LOC (now standing at $100K) interest still has to be paid as well as the loan/s that the cashbond was initially purchased for.
Have I missed something?
I realize you get paid interest on the cashbond but assume that also goes on loans.
Regards
Marty