Secured 7%+ Bonds

Issued by 

Capital Alliance, LLC

The low interest rates paid on CDs have investors seeking income alternatives that are safe yet pay higher returns.  Consider Capital Alliance, LLC’s Senior Secured Bond for your Income Alternative. 

Interest/Term

  • The greater of 7% or WSJ Prime Rate plus 1.5% per annum paid monthly. Bonds have a four-year term starting the month after the Bonds are issued. Bonds will repaid as they mature.

Liquidity

  • Bondholders will have a one-time option to redeem their Bonds, in part or in whole, 27 months after issuance. 

Eligible Investors/Reporting

  • Suitable for Accredited Investors and Sophisticated Investors and/or their Retirement Accounts.  A Form 1099-INT will be issued for tax purposes. Bondholders do not have any ownership of the Fund and therefore, no K-1's are required. 

Minimum Investment

  • $25,000 per Bond and can be increased in $1,000 increments (the “Purchase Price”).

Issuer

  • Capital Alliance, LLC (the “Issuer”, “Fund” or "CAL") began operation in 2006. At 12/31/2017, the Fund’s audited financial statements reflect the Issuer had $15.8 million in Assets and $6.7 million in Equity. 

  • Since 2009, the Fund or its affiliates have issued over $8.8 million of Bonds. By 9/30/2018, investors have received redemptions of $5.3 million in principal plus their applicable monthly interest payments.

  • At 9/30/2018, the Fund has $3.4 million in Bonds outstanding. From 9/11/2011 through 9/30/2018, these investors have been paid 84 consecutive monthly interest payments.

Collateral

  • Bond’s Structure has Four Layers of Safety to Reduce Principal Volatility. They are:

    • Loan to Value (LTV)/Protective Equity. The LTV of the loans securing the Bonds will be targeted at 70% creating a 30% Protective Equity Buffer.

    • Over Collateralized.  At all times, the total principal balance of the pool of loans securing all Bonds issued and outstanding will be greater than the total amount of Bonds outstanding, further increasing the Protective Equity Buffer.

    • Priority Over Fund’s Equity.  Bonds are senior to the Fund’s $6.7 million in Equity and any unsecured debt.

    • Independent Custodian.  The Collateral securing the Bonds is segregated, held and monitored by a third party agent who is charged with protecting the rights of the Bondholders

Offering Period

  • The Offering will be limited to $5 million of Bonds issued or September 30, 2019.

Our Bonds Can Diversify Your Investment Portfolio

One way to mitigate the volatility to your investment portfolio caused by stock market price fluctuations is to include fixed income and/or real estate investments in your portfolio. The Bonds offered by Capital Alliance, LLC ("CAL") can diversify your portfolio two ways because they are an investment in fixed income and/or real estate debt.

CAL Bonds As A Fixed Income Alternative

This chart compares the performance of CAL’s prior Bonds outstanding against the Barclay US Aggregate Bond Index ("Index"), which is the flagship index that many bond funds & ETFs use as a benchmark to measure their performance. Per the index, during the last 16 quarters, the total return was 7.01%. Notice the volatility of total returns.  Over that same period, CAL's total return was 28% without any volatility, a steady 1.75% return per quarter. The Bond’s principal value has remained constant, without volatility, due to Four Layers of Safety built into the Bond’s structure.

Real Estate Debt: CAL Bonds v. Individual Trust Deeds

CAL Bonds
  • 7.0%+ Gross Yield.  Ongoing monthly payment regardless of any Trust Deed pay off.

  • Diversified Investment.  Loans on many properties with multiple Borrowers.  Continuous payments. 

  • Minimum investment $25,000.

  • Liquidity: Four-year maturity. Can opt out after 27 months.

  • No Loan Servicing charge. Gross Yield = Net Yield

Individual Trust Deeds
  • 7.5 to 9.5% Gross Yield until the Trust Deed pays off. 0% Yield until replacement Trust Deed found.

  • No Diversification.  Loan is on one property with one Borrower.  If loan defaults, no income.

  • Minimum investment $100,000

  • Liquidity only when Trust Deed pays off or matures. 12-30 months.

  • Loan Servicing charge of .5 to 1% per year. Gross Yield is reduced by this charge. 

The reason that investors invest in an individual trust deed is to receive high yields (7.5 - 9.5%​ gross annual interest rates).  When that trust deed pays off, the investor receives zero return until a suitable replacement trust deed is found.  Finding a replacement can take months.  For example, if during a 24 month period, a trust deed paying 8.5% pays off and there was a 3 month gap before a comparable trust deed could be found, the investor yield for that 24 month period drops to 7.47% less any Loan Servicing charge. 

The CAL Bond's annual 7%+ gross yield is paid monthly regardless of a pay off of one of the Trust Deeds securing the Bond.  There are no gaps in payments and there is no Loan Servicing charges. 

CONTACT US FOR MORE INFORMATION 

Call us at (888) 224-8111 or email us below:

NMLS Consumer Access.PNG
  • LinkedIn Social Icon

License Information:

Capital Alliance, LLC is licensed by the CA Department of Business Oversight

CFL License 60DBO 43334 / NMLS #1243767

Capital Alliance Advisors, Inc. is licensed by the CA Department of Business Oversight CFL License 605 3456

Capital Alliance Investments, Inc. is licensed by the CA Department of Real Estate DRE License 01922008 / NMLS #1169305