TWiki . Edumacation . SherbourneFinancialPrimeCertificatesOfParticipation	TWiki . { Main | Edumacation | TWiki | Test }
	Edumacation . { Home | Users | Changes | Search | Go }

Well who doesn't want some of this?

An investment where your principal is guaranteed, the interest rate is 1.25% above the Fed Funds rate (subject to a 4.91% minimum), with the ability to obtain the full balance of your certificate on 15 days notice without penalty? The same business is offering "secure" certificates that initially pay 6.75% interest, with interest rates increasing each year by 1/4% over the next 4 years up to 7.75%.

What's the story?

Every deal has to have a story. Sherbourne offers a story for each of these investments:

• Principal Secured Prime Certificates of Participation
  • These fund are invested in securities designed to insure principal repayment which provides principal security, including, but not limited to, private placement corporate debt and high grade corporate bonds.
• Principal Guaranteed Prime Certificates of Participation
  • These funds are invested in federal, state and municipal government securities that are either government guaranteed or that are insured by MBIA or AMBAC.

Maybe it's those savings on administrative costs!

Sherbourne points out that it isn't required to file 1099 notices on income the revenue from it's Prime Certificates, thereby enabling it to pay higher returns by avoiding the "heavy administrative costs" involved. Even if the annual cost for filing 1099's were $50 per account, that would only account for 0.5% on the minimum $10,000 investment.

Prudent investment? Or yet another Madoff?

Sherbourne suggests that you can be "comfortable in the knowledge that your principal will be there for you when you need it." I don't think so.

Topic SherbourneFinancialPrimeCertificatesOfParticipation . { Edit | Ref-By | Attach | Diffs | r1.1 }

You must register before editing pages or using other extended features on this TWiki system.

Revision r1.1 - 30 Mar 2009 - 03:20 by EliMantel  Privacy Policy

Copyright © 2000-2005 by the contributing authors. All material on this collaboration tool is the property of the contributing authors. Collect email addresses here. Ideas, requests, problems regarding TWiki? Send feedback.