September 22, 2024

The YTM parameter (note: abbreviation composed of the initial letters of Yield to Maturity) indicates the expected annual percentage return on the investment in a loan if it is held until the last payment is due. On the BONDSTER platform, you will see this indicator for loans offered on the Secondary Market and it serves to protect investors from investing in non-performing loans.

The YTM parameter includes possible surcharges or discounts and is based on the assumption that future loan repayments will be made according to the repayment schedule. If a loan is in default, it is assumed that the repayment will be made the following day.

If you decide to offer loans for sale on the Secondary Market, setting the surcharge too high may result in a negative YTM. Such loans cannot be placed on the Secondary Market. If this happens, the surcharge will have to be reduced so that the YTM is at least a zero.

If the YTM decreases to negative after a loan is published on the Secondary Market (note: interest is paid over time and the YTM decreases, and at some stage may fall below the surcharge value of the placed loan), the loan will be withdrawn from the Secondary Market. You will be notified of the loan withdrawal by email.

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