Loan notes: Is the risk worth double-digit returns?

Dolphin fiasco a reminder of what can go wrong with unregulated investments

Loan notes will typically offer returns of 6-10 per cent a year and short investment terms of up to about three years. Interest is paid at stated points during the term, with the capital repaid at the end.

Loan notes will typically offer returns of 6-10 per cent a year and short investment terms of up to about three years. Interest is paid at stated points during the term, with the capital repaid at the end.

They may have come to the fore earlier this year following the collapse of German property vehicle Dolphin Trust, but loan notes have been around the Irish market for quite some time now.

Student accommodation, an energy company, new houses, a distillery, a bread maker; these are just some of the loan note opportunities sold in recent years, promising, in some cases, double-digit annual returns.

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