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Software shows IFAs if bonds will return cash

Software company Azarat is launching an online system next month allowing IFAs to see if their clients&#39 structured products will return reduced capital at maturity.

The system will provide IFAs with endowment-style red, amber and green status evaluation reports which show whether a structured product is likely to return capital or whether the index to which it is linked must grow to avoid a shortfall.

If a bond has a red rating – meaning it has already breached its capital guarantee threshold – Azarat can show by how much an index needs to grow before the bond will return the full amount of capital within the product&#39s parameters.

Similar information is available for amber and green ratings but Azarat says it may levy an additional charge for access to its most extensive level of information.

So far, it has 26 bonds on its system which are due to mature over the next 12 months. Of these, 15 are in the red category, four are amber and only seven are certain to return investors&#39 full amount of capital.

Companies with bonds in the red category include GE Financial Assurance, AIG Life, Skipton and Canada Life. Azarat is seeking further information from other providers it has identified as having issued similar bonds.

Managing director Paul Paton says: “It is obvious that a significant number of investors have substantial investments in issues offering little or no transparency. We aim to give professionals the information their clients need at a glance.”

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