To know the characteristics, read more about the specific characteristics of the L Bond below:
1. The bonds were offered in $1,000 denominations, with a $25,000 minimum investment required for each participant.
2. You might buy the bonds directly from GWG Holdings or from a participant in a Depository Trust Company (DTC).
3. During the whole bond period, the interest rate paid to the L bondholder remained constant. If the investor decides to renew the bond before it matures, the new interest rate will be applied to the bond if GWG changes the interest rate on the bond.
4. The L bond was automatically renewed to a comparable offering at maturity unless the investor or the issuer chose to redeem it.
5. The bonds had a call option. The company maintained the right to call and unconditionally redeem all or a portion of the L bonds at any time.
6. Except in the event of death, insolvency, or disability, bondholders could not redeem the bond before to its maturity. If GWG consented to redeem a bond for reasons other than the above catastrophic conditions, a 6% penalty fee would be applied and deducted from the amount redeemed.
7. Because there was no secondary public market for these sales, L bonds were illiquid investments. It was therefore extremely unlikely that these bonds could be sold again. Due to L bonds’ illiquidity, holders were forced to hang onto them until maturity or pay a 6% redemption fee in order to sell them if the bond underperformed.
8. There was no market correlation for L bonds. The bond’s value was thus generally unaffected by the financial market’s volatility.
9. L Bond holders and other holders of secured debt would both get equal treatment and no advantage when it came to demands for payment in the event of a default.
