The Masonic Bond is finally paying off after the Euroclear fiasco
Every time Peter Cloke visits his wife Millie at her care home in Woodbridge, Suffolk, he brings treats such as chocolates or sweet-smelling shower gel.
To pay for this, the 79-year-old former accountant invested £5,000 in a new bond from the Royal Masonic Benevolent Institution Care Company (RMBI) in March.
Founded in 1850, the RMBI runs care homes and sheltered housing for more than 1,000 Freemasons and others.
The issue was a success, raising £20 million. The bonds, which mature in 2029, offer an interest rate of 6.25 percent, paid out twice a year, with the first payment due on September 7.
Peter had previously only invested in shares and unit trusts, but the charitable nature of the bond attracted him. The Masonic support was reassuring and he was enthusiastic about the fixed six-monthly payments, which he decided to spend on delicacies for his wife.
Weak link: every party had done its part, except Euroclear
After buying the bonds through wealth platform Hargreaves Lansdown, Peter checked his account for the first payment on September 7. It hadn’t arrived yet and as the days passed he became concerned. Peter was not alone. Hundreds of investors were in the same boat, many of whom had put £15,000 or more into the bond issue.
Mark Lloyd, chief executive of the RMBI, was surprised when distressed bondholders contacted the charity. He had ensured that the money was sent to the bondholders on time.
But the process is complex, with the funds passing through intermediaries before reaching Euroclear, the Brussels-based clearing system ultimately responsible for sending the money to brokers and investors.
Research by The Mail on Sunday showed that all parties had done their part, except Euroclear. It only moved the money at the insistence of Lloyd and colleagues. However, the bondholders were paid at the end of last week. Now Peter can buy something tasty for his wife.