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As a result, the principle of a bond has endured for nearly 1,000 years: When an institution needs money, it issues a bond to raise funds from investors. A traditional bond has a set term. When it expires, the investment is returned to the investor; throughout the term, the investor receives a set or variable interest rate at regular intervals. Government bonds were especially popular during peacetime because investors felt confident that they would get their money back – such as the German federal savings bonds, which were popular at the time.

Securitisation, which establishes a deed that specifies the terms (collateral, money paid in, maturity, interest payments), is at the heart of the processes surrounding the issuance of a bond. An independent organisation draws up this document in accordance with the agreements reached between debtor and investor. The same or another institution verifies and validates the existence of the collateral indicated by the debtor. Such a securitised deed is tradable as a security and hence easily transferrable from one creditor to another.

The nations’ relevant legislative frameworks specify how exactly a bond is established and which institutions play specific roles in Europe today. Because bonds can only be issued by legal entities, the entire process usually necessitates the participation of one or more service providers. In an ideal world, the future debtor would obtain all required services from a single source.

Bonds, particularly bearer bonds, have long been popular with investors as a way for corporations to raise funding for planned projects without having to borrow from banks. Issuing bonds was a difficult and costly project for small and medium-sized enterprises until recently.

Nowadays, bonds and corresponding debt instruments are also used to securitise a wide range of different risks.

Since 2013, Chartered Investment has operated the bank-independent issuing platform Chartered Opus under Luxembourg law and has since completed over 750 securitisations as a service provider - including and especially for companies and product initiators that would not have been able to issue bonds without this assistance.

Typically, the process begins with a bond idea, which is then analysed by Chartered Investment professionals and transformed into a setup that, on the one hand, adheres to the ideas of the prospective product partner while also being appealing to possible investors. If the initiator accepts the terms, Opus assumes control of the securitisation. This is accomplished through the use of a proprietary IT infrastructure and standardised processes for automated product documentation, price calculations, and life cycle management.

Crypto securities, or bonds that employ a blockchain as a register for securitisation, can now also be supported by the subsidiary E-Sec.

Because Opus is governed by the Luxembourg Securitisation Law of 2004, assets belonging to various investment products can be divided into compartments. This simplifies bond setup because a fresh setup does not need to be created for each new product. This structure, as well as the high level of automation in the downstream processes, considerably reduces the costs of an issue for clients.

Furthermore, when compared to regular bonds, compartmentalisation offers considerable advantages in risk allocation. A compartment’s assets and liabilities are legally separated from those of other business units. As a result, losses in a compartment are limited to the assets of that specific division, with no impact on other investors or business units of the SPV.