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Varo Jan
Caravanserai Consulting
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Posted - 2010.07.30 17:35:00 -
[1]
Premium Bonds
Concept A Premium Bond is a lottery bond issued by the United Kingdom government's National Savings and Investments scheme. The government promises to buy back the bond, on request, for its original price. They were introduced in 1956. Over one third of the UK population own premium bonds.
The government pays interest on the bond (currently 1.5%), but instead of the interest being paid into individual accounts, it is paid into a prize fund from which a monthly lottery distributes prizes, or premiums, to those bond-holders whose numbers are selected randomly.
Investors can purchase bonds at any time; after 30 days, their bonds are eligible for the draw: their numbers are entered each month, with an equal chance of winning any prize, until the bond is cashed in.
And that's what I would like to do here, with modifications to suit our environment.
Premium Bonds Offering Premium Bonds corporation (PBOND) will offer 10 billion in premium bonds. Each bond will cost 25 million ISK. The maximum holding per person will be 500 million ISK. The bond will launch when the full 10 billion is paid up. Preference will be given to the smallest investors.
Prize Fund At the end of each month, Chribba Dice will be used to determine the winners for that month. Prizes will be: 50 million ISK û 1 winner 5 million ISK û 3 winners 1 million ISK û 85 winners
In the first month, there will be a bonus premium bond prize of a Primae. Seemed apt somehow. :)
Prizes will be paid out by my alt in PBOND, Premiatita. The top 4 prizes will be paid out immediately after month end, and the remaining prizes will be paid out within one week.
I've tried to structure this in a similar fashion to UK premium bonds, but there are differences. The fund is more heavily skewed to the largest prize, and, according to my calculations, the odds of winning a prize are better. Some tweaking may have to be done, especially if the fund expands.
So best case scenario is that you buy a bond for 25m and receive 50m each and every month. I'm sure someone will be able to tell me the odds of that happening. :)
Application of Funds Bonds will be used to expand One Stop's BPO library. The CEO of PBOND will be an alt of Grendell's. Only he will have access to the master wallet, which is where bond payments will go. Grendell will purchase the BPOs I request and lock them down in One Stop.
What that means is that I don't have access to the cash at any time, and the premium bonds are fully collateralised.
Audit The corporation will be audited by Magnu Stormhawk and accounts will be published every quarter.
Buybacks Bonds will be repurchased at face value on demand. It may take a week to process buybacks. It should be possible for bond holders to resell their bonds, but I haven't worked out a mechanism for that or discussed it with Grendell.
Gifts People may buy premium bonds as gifts for friends. The payment should include the word ôGiftö in the description, and an Eve mail must be sent to Premiatita specifying the name(s) of the beneficiaries.
So, over to you guys for feedback...
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Sebastian Draconis
Draconis Holdings
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Posted - 2010.07.30 17:56:00 -
[2]
Originally by: Varo Jan
Investors can purchase bonds at any time; after 30 days, their bonds are eligible for the draw
Just to be clear, in the above you're talking about what they do in the UK right?
Your bond is capped at 10bil initially and I assume additional people won't just be allowed to buy in and water down the odds. Correct?
Your signature exceeds the maximum allowed filesize of 24000 bytes -Rauth Kivaro ([email protected])
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cosmoray
Bella Vista Holdings Corp
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Posted - 2010.07.30 18:13:00 -
[3]
Edited by: cosmoray on 30/07/2010 18:15:19 Why do you need more financing?
No matter what way you look at this, it is just another means of raising capital (just like the UK Government). You are also offering a 1.5% return per month.
That is the lowest return of all IPO's/bonds offered in MD. Lower than BB and BMBE. IMO I think your accounts can't be in that great of a position. Constant refinancing, requiring extra capital. Your books didn't look that good, you were barely profitable. Any slight change in operating circumstance and you will lose money.
Personally I think your more of a credit risk now.
Lets be clear about something, there is no way in hell you would have been able to buy OSMS without full collateral lockdown.
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Varo Jan
Caravanserai Consulting
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Posted - 2010.07.30 18:26:00 -
[4]
Originally by: Sebastian Draconis Just to be clear, in the above you're talking about what they do in the UK right?
Your bond is capped at 10bil initially and I assume additional people won't just be allowed to buy in and water down the odds. Correct?
That's correct on all counts. I actually believe this would work better with larger numbers, but 10B is a realistic number to start with. Should there be an expansion, any changes to the odds or the spread of prizes would require full discussion in advance.
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Estel Arador
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Posted - 2010.07.30 18:26:00 -
[5]
Originally by: cosmoray That is the lowest return of all IPO's/bonds offered in MD.
Let's not forget the 0% bond (via Dutch auction) some time ago. There's way too much isk and way too few decent (or even half-decent) offerings.
Free jumpclone service|1092 stations! |
Ray McCormack
Nordar Innovations.
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Posted - 2010.07.30 18:33:00 -
[6]
Originally by: cosmoray your
you're
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Lucyna
Minmatar
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Posted - 2010.07.30 18:41:00 -
[7]
# Bonds offered = 400
EV of interest on one bond, per month: (1/400)*50M+(3/400)*5M+(85/400)*1M=375,000
Expected Monthly Return = 1.5%
For anyone who's curious... He didn't specify what this bond's interest rate would be, but it does line up with the 1.5% he mentioned.
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Varo Jan
Caravanserai Consulting
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Posted - 2010.07.30 18:49:00 -
[8]
Originally by: cosmoray Why do you need more financing?
Because I have identified profitable expansion opportunities.
Quote: No matter what way you look at this, it is just another means of raising capital (just like the UK Government).
Of course it is. What's your point?
Quote: You are also offering a 1.5% return per month.
That is the lowest return of all IPO's/bonds offered in MD. Lower than BB and BMBE.
Please read what I said again. This is a hybrid. It is part bond and part lottery. I am not offering a fixed return of anything to all investors, so a comparison with IPOs/Bonds is not valid. All investors have an equal opportunity to win prizes.
Quote: IMO I think your accounts can't be in that great of a position. Constant refinancing, requiring extra capital. Your books didn't look that good, you were barely profitable. Any slight change in operating circumstance and you will lose money.
Personally I think your more of a credit risk now.
Well, you're entitled to your own opinion. However, with respect, you didn't understand the set of accounts that were presented for OS. Nor do you know what my other activities are, nor my net worth - so you are not in a position to make a qualified judgement.
Quote: Lets be clear about something, there is no way in hell you would have been able to buy OSMS without full collateral lockdown.
Another inaccurate statement. OS was purchased with 125B collateralised by BPOs, 25B backed by personal guarantees by Ji, and 25B not collateralised at all.
That was the past, so I don't understand the relevance here. Besides, these premium bonds would be fully collateralised.
And while we're talking about clarity, you should be clear about something. I could raise 10B at 3% from a number of sources immediately. I choose to do this because it has cost advantages to me and because it's a novel approach that hasn't been tried before in MD. And that appeals in itself.
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CCP Adida
C C P C C P Alliance
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Posted - 2010.07.30 19:00:00 -
[9]
Moved from market discussion.
Adida Community Rep CCP Hf, EVE Online
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Varo Jan
Caravanserai Consulting
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Posted - 2010.07.30 19:01:00 -
[10]
Originally by: Lucyna # Bonds offered = 400
EV of interest on one bond, per month: (1/400)*50M+(3/400)*5M+(85/400)*1M=375,000
Expected Monthly Return = 1.5%
For anyone who's curious... He didn't specify what this bond's interest rate would be, but it does line up with the 1.5% he mentioned.
No, I didn't specify the interest rate because, from the viewpoint of someone who buys one premium bond the return could be 0 in any one month or he could receive twice his capital at the other end of the scale. That's the lottery side.
From my perspective, I have an obligation to pay 1.5% into the prize fund each month, which will then be distributed as prizes.
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Breaker77
Gallente Reclamation Industries
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Posted - 2010.07.30 19:03:00 -
[11]
Originally by: CCP Adida Moved from market discussion.
Yeah because all the other 10,000 bond offerings are still in the MD forum this needs to be in sell orders
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Ray McCormack
Nordar Innovations.
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Posted - 2010.07.30 19:05:00 -
[12]
Originally by: Varo Jan However, with respect, you didn't understand the set of accounts that were presented for OS.
That doesn't mean his statement about OS being barely profitable is incorrect. And it's partly unclear which entity is securing these bonds (financially, not locking down assets) so either your personal activities nor nett worth have any bearing; or you are obligated to disclose them.
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Ray McCormack
Nordar Innovations.
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Posted - 2010.07.30 19:08:00 -
[13]
Originally by: CCP Adida Moved from market discussion.
Adida, this issue has been cleared with the community team countless times before (most recently with Pete "Navigator"); sale and auction threads of financial items such as shares and bonds have been allowed in MD.
Please move this thread back.
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israus
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Posted - 2010.07.30 19:09:00 -
[14]
Originally by: Breaker77
Yeah because all the other 10,000 bond offerings are still in the MD forum this needs to be in sell orders
give them time breaker all these bond offerings must be causing server lag so the mods can't do anything just give them time for the lag to subside so they can get back to moving random threads all over the place.
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Lucyna
Minmatar
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Posted - 2010.07.30 19:12:00 -
[15]
Originally by: Varo Jan
Originally by: Lucyna # Bonds offered = 400
EV of interest on one bond, per month: (1/400)*50M+(3/400)*5M+(85/400)*1M=375,000
Expected Monthly Return = 1.5%
For anyone who's curious... He didn't specify what this bond's interest rate would be, but it does line up with the 1.5% he mentioned.
No, I didn't specify the interest rate because, from the viewpoint of someone who buys one premium bond the return could be 0 in any one month or he could receive twice his capital at the other end of the scale. That's the lottery side.
From my perspective, I have an obligation to pay 1.5% into the prize fund each month, which will then be distributed as prizes.
http://en.wikipedia.org/wiki/Expected_return
Actual and expected returns are quite different. I mean... I was pretty clear and all I wanted to do was outline moar info for the purchasers of these Premium Bonds, but I guess no good deed goes unpunished...
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Amarr Citizen 155
Nordar Innovations.
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Posted - 2010.07.30 19:25:00 -
[16]
Originally by: Ray McCormack
Originally by: CCP Adida Moved from market discussion.
Adida, this issue has been cleared with the community team countless times before (most recently with Pete "Navigator"); sale and auction threads of financial items such as shares and bonds have been allowed in MD.
Please move this thread back.
Just a guess, but I think this was moved because it looks very similar to lots of lotteries that are in the sell forums. I can't be sure because he didn't specify but when you first read it, it appears more like a lottery than an investment.
-----------------/finger I only post on MD when I'm too drunk too give a ****. |
Dzil
Caldari Caldari Independent Navy Reserve OWN Alliance
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Posted - 2010.07.30 19:54:00 -
[17]
Most investments in EVE look like a lottery :P
Retired from corp sales. Time to spend some of this on pretty explosions :) |
Shar Tegral
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Posted - 2010.07.30 20:30:00 -
[18]
Originally by: Dzil Most investments in EVE look like a lottery :P
This one even says pay out is only by lottery. Looks like a lottery, smells like a lottery, uses the word lottery.
Wealth, howsoever got, in Eve makes Lords of morons and gentlemen of thieves; Aptitude and intellect are needless here; 'Tis impudence and money that grants fame. |
Phoebe Halliwel
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Posted - 2010.07.30 20:45:00 -
[19]
Originally by: cosmoray
IMO I think your accounts can't be in that great of a position. Constant refinancing, requiring extra capital. Your books didn't look that good, you were barely profitable. Any slight change in operating circumstance and you will lose money.
Personally I think your more of a credit risk now.
Lets be clear about something, there is no way in hell you would have been able to buy OSMS without full collateral lockdown.
Varo is more than able to answer for himself, so I'll try stick to points relevant to my experience of OSR. Since Varo originally took over One Stop 1. Interest payments for were made in full on time <- I can confim that as an investor 2. Accounts were prepared in accordance with gaap, audited fully by Magnu (I also reviewed them, as I believe several other people from MD did) 3. The secured/unsecured portion of the business has been transferred from public to private with a respected member of MD, with a more favourable interest rate. 4. As Patri pointed out on his forum post, there are opportunities for OSR to expand further in the research market, Varo is taking steps to address that. 5. The 100b joint OSR expansion is fully collateralised, and I share liability.
So.. this is someone who borrowed 175b on his first offering, successfully ran the business, and has taken steps to reduce interest payments. Following on from that, an expansion was made which is joint/fully collateralised, and the franchise market is being reviewed because potential investors asked for it. If Varo for any reason is unable to make the interest payments on the expansion (which I doubt), I can cover the lot. This offering is fairly small and also fully collateralised, so really not sure why you think Varo is "more of a credit risk now" than 6 months ago? It seems more of a move by a savvy business manager looking to explore new avenues for public investment, whilst at the same time keeping his own exposure and repayment commitments as low as possible.
Bearing in mind you personally have never submitted to an audit, and appear to champion reputation backed businesses, this criticism appears quite hypocritical. From an MD point of view, OSR has been run successfully since the handover, so apart from forum based grudges and pettiness, is there even a valid criticism of his reputation? If you are concerned mainly because of the presure of borrowing significant amounts of isk in relation to personal NAV, and the risk of burnout, you've asked that question previously and been answered. It is a valid concern, but there are market factors that need to be taken into consideration.
The markets OSR operate in are very strong. I can confirm this as Varo's main competitor in one area, with only a handful of others operating at this level, who we also have dealings with. We effectively neutralised each other by entering into a trade agreement, which makes our respective position stronger. One thing to note; my business is totally different to Varo's (and predates the OSR handover by some time) in that I operate with higher turnover, zero fixed assets, and a fraction of the financial investment. Since we only started co-ordinating our activities fairly recently, you haven't seen the results on Varo's financial statements as yet. I'm not sure whether he will continue to publish these, given OSR is now privately funded, although I do hope so as the accounts should be easier to prepare and show a significantly increased position. We've also discussed a merger, but it's fairly low on the to-do list. My NAV does exceed OSR's liability, would that make me a better or worse credit risk, or a better or worse business manager by your rather fluid standards?
If any loans were taken and defaulted on, or promises made and broken, I could understand serious criticism. But credit where it is due.
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Breaker77
Gallente Reclamation Industries
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Posted - 2010.07.30 20:50:00 -
[20]
Originally by: Phoebe Halliwel
The markets OSR operate in are very strong.
I somehow doubt the dread BPC market is very strong considering that having more than 5 ships in the same system causes the node to lag out and crash.
As for his Orca BPC pack sales I know of many others who are selling packs for less than OS.
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Phoebe Halliwel
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Posted - 2010.07.30 21:24:00 -
[21]
Originally by: Breaker77
Originally by: Phoebe Halliwel
The markets OSR operate in are very strong.
I somehow doubt the dread BPC market is very strong considering that having more than 5 ships in the same system causes the node to lag out and crash. As for his Orca BPC pack sales I know of many others who are selling packs for less than OS.
I didn't specify the market. Don't make assumptions
That said, selling for less isn't always a sign of success, and dreads are being bought up and boiled down for supercaps by plenty of people atm as it shortens the logistics chain.
Point taken about the lag though
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Breaker77
Gallente Reclamation Industries
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Posted - 2010.07.30 21:34:00 -
[22]
Originally by: Phoebe Halliwel dreads are being bought up and boiled down for supercaps by plenty of people atm as it shortens the logistics chain.
Why wouldn't you just use Kazuo Ishiguro mineral compression service?
Unless of course you are preying on people that think the minerals they mine are free Which, BTW, are some of my best customers
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Phoebe Halliwel
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Posted - 2010.07.30 22:01:00 -
[23]
Originally by: Breaker77
Originally by: Phoebe Halliwel dreads are being bought up and boiled down for supercaps by plenty of people atm as it shortens the logistics chain.
Why wouldn't you just use Kazuo Ishiguro mineral compression service? Unless of course you are preying on people that think the minerals they mine are free Which, BTW, are some of my best customers
I'm taking this as a genuine question, not a troll, so please treat the reponse as such.
I'm really not an expert, but I know plenty of people gagging to get into supercaps, and they do tend to babble about what they are doing. With mineral prices being so low atm, carrier and dread build cost is pretty low, but supercap prices aren't following so people are looking at self build options. Say you want a Nyx (someone explained this to me the other day, but I was drunk, so bear with me) it's something like 10-15 carriers (?), which you can either build in lowsec, or buy dirt cheap (which seems to be the preferred option) and just jump the ship out to your 0.00 build location, then repro back into built cap construction parts. That's 15 jumps, as opposed to the compression service which (afaik, but as I say, no expert) seems significantly more in terms of freighter/JF runs and time spent at the other end building the cap comps, where you also have to factor in costs for BPCs or BPOs to build from.
Titans are around 30 dreads (again, hazy on this) or 70 JF runs for the compressed materials, so my babblers tell me they are stocking up on caps while they are cheap and they can pile them up in safe locations in lowsec for repro later on, as opposed to the compression service which requires a significant portion of the cost upfront. 1b chunks look more attractive from this point of view, regardless of the overall cost/saving. Only thing is, I'm basing this on the assumption you can repro caps into the construction parts to cut down build time, which I've been told of, but never done personally. I thought until recently caps just reproed back into mins. So all my assumptions on this and how it affects the BPC market might be incorrect if that isn't the case =P
That said, I do monitor kit sales overall and dreads are up 10-20% in price for some races, and appear to be moving faster than normal, although that may be a seasonal thing.
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Breaker77
Gallente Reclamation Industries
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Posted - 2010.07.30 22:07:00 -
[24]
Edited by: Breaker77 on 30/07/2010 22:08:03
Originally by: Phoebe Halliwel
I'm taking this as a genuine question, not a troll, so please treat the reponse as such.
Which is good because I wouldn't troll on this subject.
but supercap prices aren't following
Supercaps can only be built where sov is established. While being no expert on supercap construction, I would guess that most of the cost of building a supercap goes to the alliance that has sov over the space where one is being built.
edit: I do agree it is easier to jump dreads/carriers than it is to move jump freighters full of modules.
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Varo Jan
Caravanserai Consulting
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Posted - 2010.07.30 22:20:00 -
[25]
Moderators seem to have missed the point that nothing is being offered for sale here.
The concept of Premium Bonds is under discussion in this thread.
Moderators may also find it useful to know that the UK government classifies Premium Bonds as investments.
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Varo Jan
Caravanserai Consulting
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Posted - 2010.07.30 22:27:00 -
[26]
Originally by: Shar Tegral
Originally by: Dzil Most investments in EVE look like a lottery :P
This one even says pay out is only by lottery. Looks like a lottery, smells like a lottery, uses the word lottery.
A lottery is a one-off event. You buy a ticket, it goes into a draw, you win or lose. Your ticket is worthless after the draw. You can't sell your ticket back. End of story.
With premium bonds you buy a bond, you can redeem it at any time at what you paid for it, your bond stands a chance of paying out each and every month you hold it.
Huge difference.
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Formular 1
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Posted - 2010.07.30 22:31:00 -
[27]
OMFG this is "sell orders" if you want discussion take it else where
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Breaker77
Gallente Reclamation Industries
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Posted - 2010.07.30 22:33:00 -
[28]
Originally by: Varo Jan
Originally by: Shar Tegral
Originally by: Dzil Most investments in EVE look like a lottery :P
This one even says pay out is only by lottery. Looks like a lottery, smells like a lottery, uses the word lottery.
A lottery is a one-off event. You buy a ticket, it goes into a draw, you win or lose. Your ticket is worthless after the draw. You can't sell your ticket back. End of story.
With premium bonds you buy a bond, you can redeem it at any time at what you paid for it, your bond stands a chance of paying out each and every month you hold it.
Huge difference.
You worded you offering the wrong way
Quote: Premium Bond is a lottery bond
and then you said this
Quote: your bond stands a chance of paying out
So in otherwords, you might get nothing.
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Phoebe Halliwel
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Posted - 2010.07.30 22:40:00 -
[29]
Edited by: Phoebe Halliwel on 30/07/2010 22:40:34
Originally by: Varo Jan A Premium Bond is a lottery bond issued by the United Kingdom government's National Savings and Investments scheme. The government promises to buy back the bond, on request, for its original price. So, over to you guys for feedback...
It's quite clearly a discussion. In fact if this should be in Sales no discussion is allowed, so keeping it here is quite hilarious. That said we can carry on with the discussion and utterly undermine the purpose of the current forum. ed. spelling
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Estel Arador
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Posted - 2010.07.31 00:23:00 -
[30]
I fully agree with Phoebe, especially that last post.
Premium bonds seem like an interesting way to raise money. It might be more manual work than simply issuing dividends though.
Free jumpclone service|1092 stations! |
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