Market Discussions

10 Bil Bond with 5% interest
Can be Fully Collateralized (up to 110% of jita sell) with your choice of 3rd party service if demanded
Due: Feb 1, 2012

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Background:
Your standard station trader with a few inter-region alts that side dabbles in contracts trading. This should be obvious with a short check on the character. (buy my stuff, btw!) Recently a week ago I started speculating in some low liquidity markets with my unused capital, while keeping enough liquid as working capital. However a few events have conspired to drop the pool of usable liquidity, including a 3bil petitionable loss (still waiting on that), character purchase for 4.3bil and random "its christmas lets spend money" activities which means I may have to scale back on my market activities.

As such I am going to ask for a fully colleralized bond with my speculating items to allow me scale my operation back to where I'm comfortable with.

Thank you.

If Vaerah Cant do the whole Bond, im ready to give 5B
pm me

Damn these sensible public transactions. Damn them!

A fully collateralized bond...On MD?

Edit: Has this been filled?

When you use speculative items, the process is like this:

1) The 3rd party appraises the goods. They are never valued at current buy / sell prices because a price swing could make the whole collateral worth 80 percent of the bond even if it started at 110 percent. 110 percent has also to cover the interest rate.

2) You create a contract, swapping NN items (each valued in step 1) so that

NN items * value = 110 percent bond value.

You basically swap 11B worth of items with 10B.

If the items are not in Jita, there are usually surcharges due to having to factor freighting the collateral over there in case liquidation is needed.

3) You do whatever you want with those 10B till bond matures.

4) I create a contract to you, where I swap those NN items I was holding for 10B + interest.


The whole process should not be error prone, the risks are 3:

1) Investee (you) disappears. I'll have to liquidate the whole stock, which in some cases can take weeks.

2) Collateral stock value plummets. At this point, only Investee's honesty will play against the temptation to just do 1). EvE is not known for honesty.

3) Investor disappears. You risk losing the equivalent of 10 percent collateral value plus its possible appreciation.


Hope this makes it clear. I will send you an in game mail when server is back up (it went down in the middle of writing it).


Edit: a further clarification.

In case you find the appraisal value to be not aligned with your expectations, I may also just act as 3rd party Collateral Holder. In that case the transaction becomes "triangular". The Investor(s) will have to know about your stock though, since you did not specify whether you want "just" 3rd party collateral holding or also an insurance against its possible depreciation.

In case you wish to learn more about insurance, you may EvE-Search for my past 3rd insured collateral holding operations or look on my own website for some examples of past contracts, like this one.

Edit 2: due to known bug, this completely amateur forum software forced me to replace all percent signs with the actual word.

Edit 3: mail sent.

A contract for 10.5B (10B principal + 5% interest) has been created.

The contract will expire in 1 week, after which the collateral will be liquidated (for a very nice markup of 4.3B none the less).

The loan matured therefore the month has passed.
This second contract is basically about swapping back the collateral versus principal + accrued interest.

Usually after 3 days or so of not being paid back the loan is declared defaulted (and the OP states 1 Feb) but I prefer giving a week.
Once the week has passed, the payback contract expires and if by that date it has not be accepted / completed then I am supposed to liquidate the collateral and keep it.