Secondary market │ FAQ │ Bondster

Secondary market - FAQ

The YTM indicator shows the expected annual percentage return on a loan investment if it is held until the last payment is due. You will see this indicator on the platform BONDSTER for loans offered on the secondary market where it is used to protect investors from investing in non-performing loans.

The yield to maturity indicator includes possible surcharges or discounts and is based on the assumption that future loan instalments will be paid in line with the repayment schedule. If the loan is in arrears, it is assumed that the instalment will be paid the next day.

If you choose to offer loans for sale on the secondary market, setting a surcharge that is too high may lead to a negative YTM. Such loans then cannot be placed on the secondary market. In that case, the surcharge will have to be reduced so that the YTM equals at least zero.

If the YTM falls into negative territory after the loan is placed on the secondary market (interest is paid over time which makes the YTM decline and at some point, it may fall below the surcharge amount of the loan that is offered), the loan will be removed from the secondary market. When this happens, you will be informed about the loan removal by e-mail.

You can offer a loan on the secondary market for sale for 90 days. If nobody buys it during that time, you can offer it again. While the loan is being offered for sale, you can remove it from the secondary market at any time and adjust the parameters (discount/premium) and offer it for sale again.

It depends on your own decision and situation. If you don’t need the money quickly, you can easily offer the loan at a premium – especially in a situation when such type of loan from a particular provider is no longer available on the primary market. If you are unable to sell the loan at a higher price on the secondary market, you can always try to offer it at a discount.

On the secondary market, you can offer for sale any loan excluding the ones that must be repaid immediately, are written off or terminated and is not delayed over 60 days.

You can get to the secondary market on the investment platform through the My investments section, where you can directly offer the loans in which you have invested. To add a loan to the sales cart, click the SELL button next to the loan you want to sell (you can sell one or more at a time). After adding it to the cart, you can set a discount/premium for each loan individually or in bulk. Then, in the second step, check that you agree with the conditions and click on OFFER FOR SALE.

For each loan sold on the secondary market, the investor pays a one-time fee of 0.5% of the value of the loan sold. It is not paid when placing the loan on the secondary market but only after the loan has been sold. The investor who buys the loan on the secondary market does not pay any fee.

When selling investments on the secondary market, you can do so at a profit, loss, or for their original purchase price. The original purchase price means that you sell a CZK 100 worth of investment to other investors exactly for CZK 100. You make a profit if you sell the CZK 100 investment for a higher price. For example: If the original price of the investment was CZK 100 and you want to make a 5% profit, you offer the investment on the secondary market for CZK 105. With a loss, it works exactly the other way around and the investment will be sold on the secondary market at a lower than the original price. For example: If the original investment was CZK 100 and the discount is 5%, you offer the investment on the secondary market for CZK 95. As a result, you will probably be able to get your money earlier or, for example, withdraw from an investment where there are delays in repayments by the borrower.

When you place your loan on the secondary market, nothing changes until it is sold. After the sale, you stop receiving interest on the loan. Conversely, when you buy an investment on the secondary market, you start receiving interest from the day of your purchase.

The secondary market is a place where investors can sell their current investments to other investors on Bondster. Bondster thus offers investors additional space for investment and portfolio diversification. Selling on the secondary market also helps investors achieve higher liquidity. If they need their money sooner, they can sell part or all their investment portfolio there. When selling on the secondary market, it is possible to increase the price of the loan and thus earn more or reduce the price of the loan and sell it to other investors faster. The secondary market offers buyers access to potentially interesting offers from sellers. The buyer can thus get to buy investments on more favourable terms or for interest rates that might not be available on the primary market at that time.

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