Market Discussions

Greetings MD.
In preparation for the launch of my first bond I would like to present you with the information about my first bond. I am working on behalf of a corporation (which will remain anonymous) in order to raise funds to increase our current industry operation. The corporation is located in high-sec with 3 POS's currently running research and reactions in order to feed our manufacturers of Tech II items. Along with selling on the market we do business with combat corporations for bulk orders of specific items requested.

Now in an attempt to answer some questions up front:

Q: How much is the bond going to be for?
A: To start off with I will be issuing (20) shares @50,000,000.00 ISK(50 Million ISK per) [Par Value] for a total of 1,000,000,000.00 ISK (1 Billion ISK).

Q: How long will this bond last for?
A: The term of the bond has yet to be decided. My idea and from input from members of the corporation it will be open ended, meaning:
-No set maturity date.
-Investors will be able to withdraw their investment if they see fit to do so, however a 1 week notice will be required in order to gather the funds if they are not readily available(i.e. Tied up in orders/minerals ect.).

Q: What is the interest rate?
A: For the time being the interest rate will be 3% per month.

Q: Is this bond going to be collateralized?
A: Yes, overly collateralized in the form of PLEX. We are valuing the collateral @510,000,000.00 ISK (510 Million ISK per). The collateral will be held by a 3rd party (still in the process of talking to the collateral holders at the moment).

Q: Why will the corporation not be named?
A: Upon request from every member of the corporation, including myself, we have decided not to release the name of the corporation and the names of any of the members. This is for the safety of our manufacturing team, POS's and hauling. Wardecs don't stop us from producing and making ISK but it slows us down and we would prefer to stay away from them at all costs.

Q: Will there be an audit?
A: No. See the anonymity clause below.

Now for some of the finer details. This section will contain information that is not set in stone, and this is the main reason for creating this thread.

1. Anonymity Clause.
I know this will probably get torn to shreds but for the sake of explanation here it is. Wardecs. You all know what they are, and they are an industrialists worst nightmare (save for a massive economic collapse, but I think the US economy will collapse long before Eve's will and we as Eve players won't be worrying about Eve as much anymore).

Secondly a few of the corporation members have incredibly busy real life jobs and are only able to log on a few times a week to set up research, copying and industry jobs on some of our bigger blueprints. They also enjoy running missions and doing a bit of mining (yes I laugh at our miners too, but someone has to fuel our POS :) ) and some love to go on roams in null-sec. Having their names out there, or being Wardec'd constantly would make their limited time spent on Eve much less enjoyable.

With all this out there here are a few of the problems I see.
People will as for an audit.
-Again in order to retain anonymity no audit of our companies business side will be done. With this said I know that this will be a case for concern for many, however I will be providing screenshots of some of our BPO's and BPC's (unfortunately I will not be screen shooting them all as we have a few hundred and this would take hours).
-No API information will be provided.

2. So you have a few hundred BPO's? Why the bond? And why for so little?
-As production has increased our expenses have increased drastically. Paying for hauling of minerals and items (red frog) has gotten a bit out of hand and we have decided to start doing our own hauling. Our first freighter will be complete in a few days and this will drastically reduce our out of pocket expenses paying someone else to haul our stuff for us.
-We don't have many Tech II BPO's that are incredibly profitable so most of the manufacturing we are doing is coming from invention. As we continue to grow we hope to get our hands on some better Tech II BPO's that will increase our overall capacity and monthly profit by a significant amount.
-With much of our current ISK tied up in production we have hit a soft-cap in our current production abilities. We have characters waiting and production slots open we just don't have the ISK to fund the increase. Also in the form of collateral we just don't have enough to offer at the moment.

Ok so enough of the walls of text (I do apologize in advance if I didn't separate it enough, I know how some of you are). I would like to officially open the floor to discussion of this potential Bond. Please leave any questions, comments, concerns and anything else you feel necessary here and I will get to them as quickly as possible! Thank you for checking out the discussion phase of this operation!

Regards,
Sasha

Also prepledging Jerry's 20B as this seems to be his go to troll <3

We are in no way associated with them. I have read through their first post a bit, but after repeated attempts I have forgone reading any of them further as they have become a nesting ground for arguments that are neither worthwhile or meaningful to me.

Without even hint of making fun of you or something, but the BEST idea would be to cash in the PLEXes and avoid the bond. Considering the amount of money you require and the ambition to have things going I don't see any reason to bind yourself with the interest even low one. Except for... *Alex Grison dashes in before I say it and yells: REP GRINDING* - hehe.
Well, yes, I seriously don't see any other reason :-)
And since it's a discussion, bear with me, but you will get this filled eventually. It's just not my type of interest rate

As for collateral holding value better than PLEX it depends on maturity of the bond. But I doubt that anyone here can predict anything further than a month or two. Some things are expected to gain value in spring, but summer may be a tough time and isk may regain its value with item prices dropping, but that's an uneducated guess rather than prediction.

As I have no intention of rep grinding and I have already accepted the fact that someone will soon step in and say rep grinding or what have you. The interest rates set are due to the fact that it will be collateralized. I understand that most would say "why not sell them and get the isk?" The reason for this is at some point this bond will end, wether we decide to expand (which is an entirely different discussion altogether) or we gain the capabilities to support ourselves entirely without the help of investors, and as I am putting up the colateral myself I would like to be able to use these PLEX as some point in the future rather than have ISK in my pocket that I will likely spend on something that I definitely don't need and will eventually loose.

As to the collateral, I understand not many (maybe Grendell and a few others) are able to make decently educated guesses on the value of items many months in advance. This too is a point we must consider, as stated an "open-ended bond" in discussion phase is definitely in the front of our minds and a maturation date will most likely be set prior to the official launch.

Wonderful post Candy thank you for all the questions! I will attempt to go in order and answer as much as I can.

1. I will look into this tomorrow. As of now you are the last post I am getting to as I have 5 hours until I have to be sitting in class =/.
QUICK EDIT: I wanted to do some reading before I went to bed so I figured I may check out some information on purchasing of tier 2 battleship BPO's. Am I understanding you correctly that tier 2 is tech II or am I having delusional thoughts being that I have been up for nearly 24 hours?

2. With the injection of 1billion ISK we will be able to increase our actual output. As I stated earlier we have toons waiting and slots open to do work, we just don't have the resources to do so.

3. As of now we have 40+ slots in manufacturing however we are unable to fill them with our current "bottleneck". I will have to discuss with the corp about the rest of the slots and wether or not they want to divulge the information...I may have already said to much =X. As to the NAV I will need our bookkeeper to send me the spreadsheets as he stores all of that information.

4. Interesting point. Why would the 3rd party need to be involved in payouts? If I handle them directly it is less stress on the 3rd party (who I am sure is insanely busy) and easier on my bookkeeping. Maybe you could elaborate more, or I need to take a look at this in the mourning and give you a better answer.

5. Expansion plan is down the road. And by down the road I mean way down the road. Current investors will be given more than ample warning of a possible maturation of the bond and will be given first dibs on investing in any expansion (if it happens).

6. As to kissing....I mean KISS. I understand you're concern here, but as others have stated 2% is a small interest rate. I figured this might spark more interest in the possible offering and as easy as excel makes my life I don't think it would be too much extra hassle. As for the launch, this is why this thread is here :)

7. API information not being released is just how we are going to run things. Like I said it is for the safety and enjoyment of our pilots and industrialists who would rather not have their names and information pasted on the forums.

Again thank you for the interesting post. When I get out of class tomorrow at about 12 EST I will have a long chat with some of the

well, if the 3rd party doesn't know, or can prove the payment made(as in investor wants totally out) you wont get your collateral back. interest payments can even be made directly thru the 3rd party also.

When someone wants to cash out, send the isk to the 3rd party, or have them put up a contract for the BPO in exchange for the payout figure.

Always remember to make sure you have either one of the following in your hands, the BPO, or the loan.

Teir 2 (megathron, raven, apocalypse and Tempest) or any BPO with an NPC value that you would like to loan against. some capitol part bpo's are around the 1b purchase price.

Only reason i mentioned Teir 2, is. Those are in line to be re-modeled. after Battle-cruisers get re-done, i believe BS are in line for the next 'tiericide' and by the time the research peaks, and ME/PE are at optimal, there's a chance your corporation can benefit by getting a few builds from it. As an investment.

I idle in "syndicate rookie trader" in game and am on regularly, if you (or anyone else thinking of starting a bond) have any direct questions if you are unsure of what I said in my wall of words, or if i'm not in there or afk, i'm sure anyone in there will be able to help.

Greetings, Sasha.

I suggest you to check my collateral holding contract page out.

- I have my own ways and actuarial analysis to gauge collateral value that allow for some months worth of prediction in advance. This has usually to be re-checked before new game expansions are delivered.

- I can setup a margin system with the Investees so that no Investor ends up losing or risking over time. Basically the underlying collateral is marked to market at pre-set periods (daily, weekly...) and a delta may be requested to keep the collateral within predefined tolerance values.

- I can also setup insurance with interested parties so they are completely safeguarded against any risk of collateral depreciation.

Best regards,
Vaerah

Sounds good Candy. When I get out of class here in a couple of hours I may drop by the channel and say hello. I stayed up about an extra hour reading the most current devblog about the upcoming changes and attempting to get in touch with some of the other manufacturers. The gentlemen who holds our BPO's and organizes the transportation of BPC's never came back online so I was unable to talk to him, however I am sure I will see him by the early evening sometime.

Quick question about the Teir 2 BPO's...these are NPC bought BPO's that would need to be researched and as you stated may be held by a 3rd party in which they would do research of the BPO while in their hold. As this sounds nice in theory what about the upfront cost, in other words starting a bond for 1 billion ISK and then turning around and buying a BPO would leave us relatively where we are as it would be in possession of a 3rd party and we wouldn't be copying it? Or am I wrong? I understand collateral holders would in a few cases be willing to run research and maybe do some copying for us, but again this would only add to our already growing costs.

As I said I will talk to our BPO guy and see what he says about this and get back to you with more questions I am sure.