3.
Fixed rate of return
4.
Bond-like low level risk (save catastrophic event)
There are many strong, responsible, reliable, companies without operating capital to get to the next level. These companies pay to “show” funds as collateral in acquiring construction bonding. Construction bonds default nationwide at less than .05%. Using standard recognized bond rating from S&P and Moody’s, a bond’s rating based on default probability in the first year looks like this:
S&P Moody’s
AAA/Aaa
0.0
0.0
AA/Aa
0.0
0.0
A/A
0.1
0.0
BBB/Baa
0.2
0.2
BB/Ba
1.1
1.8
CCC
16.4
na
Investment Grade
0.1
0.1
Speculative Grade
3.8
4.2
…placing us at the A/A to BBB range. Returns are negotiable.