Our commodity-backed bond is a type of debt security where the coupon payments and/or principal is directly linked to the price of the commodity purchase by the sovereign country.
Most bonds have a fixed value determined at the time of purchase. This value is a combination of the bond’s face value and its interest rate (coupon), both of which are set at the time of issue.
Elemental Rock commodity-backed bonds are debt securities where the price of an underlying commodity directly influences the coupon payments and/or principal.
Not only can commodity-backed bonds provide bondholders with a steady source of income, but they can also be a profitable vehicle for investors who speculate that the price of the commodity will rise.
We anticipate that investors have the potential to earn more if the commodity gains value, with our sovereign commodity-backed bonds typically pay lower coupon rates than regular bonds.
Sovereign Commodity-backed bonds are issued where either the interest payments or the face value can vary with the price of the underlying commodity.
Therefore, a commodity-backed bond will experience fluctuations in value when the price of the underlying commodity rises or falls. As the bond’s issuer, we determine how the bond’s value will change with the price of the commodity. For example, we might tie a gold-backed bond's principal to $1,750 or the market price of one ounce of gold, whichever is higher at maturity.
Aside from providing the bondholder with a steady source of income, our sovereign commodity-backed bonds have the added attraction of being a speculative vehicle for investors who believe that the price of the underlying commodity that we proposed will rise.
Sovereign Commodity-backed bond has maturity of minimum of five years. Which can be classified as long-term liabilities for the sovereign state, the bond serve as important source of financing for the us while we use the capital from the bond to issue credit facility for sovereign state procurement agency/division.
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