The Bitcoin Investment Bank is offering GLBSE investors the opportunity to gain ongoing exposure to Bitcoin Savings & Trust (BS&T). Each bond represents an investment of 1 BTC in the BS&T and pays a weekly variable rate of 6.75 % of the Par Value of the bond. The investment is held in trust for the Bondholders. No insurance is offered or implied. The coupon rate will adjust should Pirate adjust his rates and shall be 25 basis points below that of a 2000 BTC investment in the underlying fund with BS&T.
The Bonds are perpetual, but may be recalled by the Issuer at a 50 basis point premium to Par Value plus the value of the next due Coupon.
The Bonds are offered and redeemed on a wholesale basis, letting the market take care of pricing.
Ticker: BIB.PIRATEThe Contract-----BEGIN PGP SIGNED MESSAGE-----
Bitcoin Investment Bank Pirate Bonds
offer bondholders exposure to an underlying investment in funds held in pirateat40’s Bitcoin Savings & Trust (BS&T)Par Value:
Each bond has an initial Par Value of 1 BTC and is backed by an investment of 1 BTC held in trust by the Issuer with BS&T [https://bitcointalk.org/index.php?topic=50822.0] as the Underlying. Coupons:
The Coupon on this bond is paid weekly. The Coupon Rate is equal to the 7-Day Interest Rate on Deposits applicable for a deposit of 2000 BTC in the Underlying, minus a fee to the Issuer of 25 basis points (0.25 %). The Coupon Rate is multiplied by the Par Value of the Bond to determine the Coupon. At the time of issue, the weekly coupon equates to 0.0675 BTC per Bond. No Insurance Offered or Implied:
This bond offering shares completely the counterparty risk of the underlying. Should BS&T fail to make interest payments or return capital to investors, the issuer of BPPT bonds will not be liable to reimburse losses and investors have no recourse against the Issuer. Call Back:
The Issuer reserves the right at any time to buy back of all outstanding bonds at a price equal to (1.005 times the Par Value) plus the full weekly Coupon. Issuance and Market Making:
Bonds will not be offered directly on GLBSE. Bonds are offered on a wholesale basis to Market Makers. A registered Market Maker may obtain Bonds from the Issuer by delivering to the Issuer a sum equal to the Par Value of the Bonds plus the GLBSE Transfer Fee plus the Issuance Fee. The Issuance Fee is set at 2 BTC fixed.
By way of example, an order by a Market Maker for 200 Bonds with a Par Value of 1 BTC and at the current GLBSE Transfer Fee rate of 20 basis points would require a sum of 202.4 BTC (200 x 1 BTC + 200 x 0.2 % + 2 BTC).
These funds must clear (6 confirmations) with the Issuer by the Cut-Off Time to be issued for that week. The Cut-Off Time is set as Mondays at 12 pm UTC. Bonds will be transferred to the GLBSE account of the Market Maker after the previous week's coupon has been paid (and carry no entitlement to that coupon). The Market Maker is free to sell the bonds on market of hold them in its own account.
The Issuer reserves the right to also act as a Market Maker. Redemption:
A Market Maker may redeem bonds at any time by notifying the Issuer and transferring the bonds to be redeemed to the GLBSE account of the Issuer. At some time after the next Cut-Off Time, the Market Maker will receive bitcoins equal to the Par Value of the Bonds plus that week's coupon minus the Redemption Fee. The Redemption Fee is set at 2 BTC fixed.
By way of example, a Market Maker redeeming 200 Bonds with a Par Value of 1 BTC and a Coupon of 0.065 BTC would receive a sum of 211.5 BTC (200 x 1 BTC + 200 x 6.75 % - 2 BTC). Forced withdrawal in the Underlying:
The situation may arise in which the Issuer's holding in the Underlying is returned by a Forced Withdrawal [see https://bitcointalk.org/index.php?topic=50822.msg605957#msg605957
]. Should the forced withdrawal relate solely to funds deposited during a Market Maker Issuance, the forcefully withdrawn funds will be returned to the Market Maker (less the Issuance Fee), and no new bonds will be issued relating to those funds.
Should the forced withdrawal relate to previously deposited funds, all bond holders shall immediately receive a Special Dividend payment according to the proportion of the fordec withdrawal to remaining funds and the Par Value of the Bonds will be reduced by the amount if this Special Dividend. Risk:
It is the Issuer’s opinion that this Bond Offering carries risk and investors are advised to familiarise themselves with such risks before investing. Definitions and Capitalised Terms:Issuer:
The issuer is "brendio" trading as the "Bitcoin Investment Bank".Par Value:
The value in BTC held in trust by the Issuer in the Underlying.The Underlying:
The underlying investment in which trust funds are invested, namely, pirateat40’s Bitcoin Savings & Trust, as outlined in the bitcointalk.org thread here: https://bitcointalk.org/index.php?topic=50822
Pirate, pirateat40: The user known on bitcointalk.org and #bitcoin-otc as pirateat40, also referred to as simply “pirate”.BS&T:
BS&T refers to pirateat40’s investment scheme as outlined in the thread https://bitcointalk.org/index.php?topic=50822
, currently known as Bitcoin Saving & Trust, and future names under which it may trade.7-Day Interest Rate on Deposits:
The weekly interest rate offered by pirateat40 for a deposit of 2000 BTC, as detailed https://bitcointalk.org/index.php?topic=50822
The 7-Day Interest Rate on Deposits minus the Issuer management fee of 25 basis points.Coupon:
The Coupon is equal to the Par Value of the Bond multiplied by the Coupon Rate.Market Maker:
A wholesale investor in the Bond offering who has registered with the Issuer.Cut-Off Time:
The time by which orders need to be received from Market Makers for the Issuance or Redemption of bonds to be processed that week. The Cut-Off Time is set as Mondays at 12 pm UTC.Issuance Fee:
A fixed fee of 2 BTC payable to the Issuer for the issuance of any number of Bonds in a single transaction.Redemption Fee:
A fixed fee of 2 BTC payable to the Issuer for the redemption of any number of Bonds in a single transaction.GLBSE Transfer Fee:
The fee levied by GLBSE for the off-market transfer of assets between users of GLBSE. At time of issue, this fee is 20 basis points.-----BEGIN PGP SIGNATURE-----
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