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Re: Questions about the bond/capital note !
Dear circleda,
Would someone please explain how the system is operated, I am really confused by the bond/capital note issued by some international schools:
1. Is it a prerequisite to have the bond/capital note before I can apply (or study in) a particular school?
Yes and no. Different schools have different requirements. With some schools, it is a must. However, some schools may give the parents the choice to pay an annual capital levy (i.e. if parents elect to pay $xxx more, they don't have to hold a debenture/capital note).
2. Is the bond/capital note grant my child the full rights to study in the school, no matter whether he's stubid or bright?
No school will give any guarantee. Yet, priority will be given to holders of capital notes.
3. Say I passed the admission interview or test or whatever, then I need to find someone holding the bond/capital note and negotiate a price with him?
Again, practice varies from one school to another. Some schools are no longer issuing any new capital notes, but some schools still are. If your target schools are not issuing any new notes, you can get one in the open market. There are a few companies that deal with tradable schools' notes.
4. What if I can't pay the price the holder(s) asking?
If one cannot get a note from the school, he can of course buy one in the market. The price that he has to pay will be the prevailing market price. Please note that the face value of a capital note may not be equal to its market value. Take XXX's notes as an example, about three years ago the schools issued a bunch of new notes at the par value of $600,000 each. The present market value of those notes is over $1,000,000 each.
What happens if one cannot afford the market price? He may try to get a new one from the school (assuming of course that the school is still issuing new notes). Or, if finance is a problem, he may try one of those schools that offer financial aid or provide other options (such as paying a monthly or annual levy)
5. If I am the holder, can I keep the bond/capital notes even after my child leave the school and wait until the price is OK for me?
Debentures and capital notes can be very different. Some (not all) debentures are not transferable but redeemable. That is to say one cannot sell the debenture issued to him but can have his money back (usually without interest) by surrendering his debenture. Capital notes are usually transferable but not redeemable, i.e. one can sell it when he no longer needs it. It is of course up to the holder to hold it as long as he wants to. Capital notes can sometimes be very good investment.
I shall stress that different schools issue debentures/capital notes on different terms. One should contact the schools for exact details.
Regards,
Warrrren |
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發表於 06-6-16 13:27
...... I might need a CFA to advise on the matter 