No. WiseAlpha is not a Peer-to-Peer lender. We do not solicit, structure or issue loans on behalf of companies or individuals looking to borrow. Instead our platform lists Notes whose underlying assets (senior secured loans or bonds) have already been issued by major international banks to large British corporate borrowers who often feature prominently in the industries in which they operate.
The senior secured loan or bond based investments we offer differ from Peer-to-Peer lending investments in the following way:
i) The borrowers are often large established companies and not individuals or small companies;
ii) Senior secured loan or bond based investments are either floating rate instruments paying a fixed margin above Libor or fixed rate instruments paying a fixed coupon. One of the variables impacting Libor is the Bank of England base rate. If inflation were to rise the Bank of England may consider raising interest rates which would directly cause Libor to rise. When Libor rises so does the interest rate on the loans. Therefore the floating rate mechanism is expected to offer a degree of protection for investors against rising inflation and provide for a real income stream;
iii) Typically first ranking senior secured loans have security over the assets and cash of the borrowing company and a pledge over the shares in the event of a default.