FAQ for CapBay Assure

CapBay Assure is a programme that is designed to provide principal and interest assurance to investors against financial losses on their investments in the event of an issuer default via a reserve fund.
CapBay Assure provides guaranteed returns to our investors through the utilisation of a reserve fund. CapBay appoints a guaranteeing entity (“Guarantee Co”) to maintain a reserve fund, designed to pay out investors the remaining principal and accrued interest in the event of an issuer’s default within T+30 days. This is done by purchasing the relevant investment note from investors, effectively assigning the rights of the defaulting note to the Guarantee Co. Any recovered sum will be subsequently injected back into the reserve fund.
To ensure we provide investors with greater confidence in the programme, the Guarantee Co will maintain the reserve fund within the prescribed coverage ratio. In determining the reserve fund’s coverage ratio, we measure the reserve fund cash reserves against the financing-book amount issued under the programme. This allows investors to have greater peace of mind that the reserve funds buffers are sufficient to withstand the expected defaults in the market outlook. To reflect the market outlook, the coverage ratio will be updated yearly or as and when necessary.
When the coverage ratio falls below the prescribed rate, no new CapBay Assure notes will be issued and the programme will be temporarily suspended until the coverage ratio is met once again. During the suspension period, existing CapBay Assure notes will continue to be shielded up to the fund’s amount.
As of June 2021, the coverage ratio of the reserve fund is maintained at 8%.
While returns to investors under the CapBay Assure programme are guaranteed even in the event of defaults, there still remains a small, but the probable amount of risk that may be borne by investors. These risks primarily pertain to the possibility that the value of defaults exceeds the existing amount of the reserve fund. 

In the unlikely event that there are a large number of defaults within a short period of time, the value of the defaults may deplete the reserved fund. In this scenario, the Guarantee Co may not be able to satisfy all payment obligations within the specified timeframes. CapBay will then have to exercise the agreed-upon recovery measures in order to return the principal and interest to investors while suspending the issuance of new notes under the programme until the coverage ratio is sufficient again.

It is important to note that beyond the risks set out here, there still remain unforeseeable risks and it is not always possible to protect against and to predict all risks.

While CapBay Assure has its guarantee mechanism, the methods of investing are similar to our other programmes such as CapBay Select and CapBay Diversified. Thus, investors will be able to automatically invest in the CapBay Assure programme through our Auto Invest function. 

However, only the Conservative and Moderate profiles include CapBay Assure notes. Alternatively, investors may also create a custom Auto Invest profile to gain exposure to CapBay Assure notes. Investors can also manually opt into CapBay Assure notes through the Manual Invest section on our mobile app or web platform.

The CapBay Assure programme invests primarily in working capital financing products that are issued by Small & Medium Enterprises.
Under the CapBay Assure programme, investors can earn 4.0 – 6.0% net returns, after deducting service fees.
In exchange for the Guarantee Co bearing the default risks, as such, investors are effectively trading some potential upside for guaranteed returns.
Similar to the investment notes in other programmes, the average tenure of CapBay Assure notes can be viewed through our Statistical performance section or the relevant investment memos and Highlight Sheet.
Investors will not be entitled to any late payment charges under the CapBay Assure programme.