FAQ
The projects
Q. What types of projects?
The projects targeted by ComboBond must be part of official sustainable development lists such as SDG's (UN), the Green Deal Taxonomy (Europe) or the list of projects authorized by the European Commission within the framework of the post-COVID-19 relaunch. The citizen must receive an attestation of the good use of the proceeds for the planned projects, in order to avoid greenwashing. European Climate DB takes care of the attestation.
Q. What project size?
All sizes are accepted from 100.000€.
Q. I want to propose a project for a private company
No problem, European Climate DB has its own specific tool.
Q. I want to propose a project for a public entity (City, Municipality, Region)
No problem, European Climate DB has its own specific tool.
Q. Which citizens can participate?
The ComboBond democratizes sustainable investment: it is available from € 100. The ComboBond is only available in Belgium for the moment, but other countries are under consideration.
2. How to prepare a ComboBond?
Q. What is the maximum amount that can be raised?
All sizes are accepted from 100.000€. However, the law requires certain formalities depending on the size:
- Segment 1: No formalities for a ComboBond of less than € 500.000 with maximum tickets of € 5.000 per citizen.
- Segment 2: for ComboBonds - either - for an amount of less than €500,000 with maximum tickets exceeding €5,000 - or - for an amount between €500,000 and €5 million, an Information Note with regulated content must be sent to the FSMA. This Information Note is automated by ECDB.
- Segment 3: more than EUR 5 million: a prospectus must be approved in advance by the FSMA. This prospectus can be produced by ECDB.
Q. What are the options: duration, recurring repayments, interest rate?
European Climate DB helps you to parameterize the ComboBonds to maximise your chances: interest rate, duration, size, type of indicators and variable interest magnitude.
Q. How can you make sure that the ComboBond will be attractive enough for citizens?
The summary is simple: the conditions must always be attractive enough to cover the risks perceived by the investor to whom the ComboBond provides a risk analysis. European Climate DB helps you to parameterize the ComboBond to maximise your chances.
Q. Can I get a capital franchise?
Yes, the most common ComboBond is an annual coupon ComboBond with a capital deductible, but it can also be considered as an amortizing loan with variable interest rates and monthly maturities.
Q. Which indicator should I choose to vary the interest rate?
European Climate DB helps to identify the best indicators. We recommend those that are already public and available to facilitate discussion and credibility (e.g., Eurostat indicators for a European level).
3. What are the steps to launch a ComboBond ?
Q. Step 1 Test (2 minutes)
Check if your project is eligible and your attraction potential here
Q. Step 2 Preparation (1 week)
Signature of the general coordination and structuring contract; setting up of the parameters: duration, index, notes, amount, reports. Identification of potential investors and mobilisation.
Q. Step 3 Launch: (2 weeks)
The procedure is facilitated by a securitization vehicle. The ComboBond project manager: has only one counterparty and the platform carries out all aspects of compliance, customer acceptance, collection, money laundering control and incoming and outgoing payments until the end of the ComboBond term.
Q. Step 4 end of the subscription period (1 month)
Launch of the obligation and communication plan. Citizens invest via the platform for 1 month.
4. And once I have collected the money?
Q. Who do I pay it back to?
You pay back to European Climate DB. The repayments are automatically distributed to the citizens via the crowdfunding platform.
Q. Do I have to do anything else in addition?
At least once a year, it is compulsory to communicate to citizens via the platform to keep them informed about the use of the funds and the evolution of the interest rate. But the communication tool can also be used more often to maintain your ambassador base.
Q. Do I have to repay the amount net or gross?
Net. Dividends are currently subject to a withholding tax that you must pay to the tax authorities. Once again, crowdfunding platforms can help you with this.
Q. Do I need an ISIN code? Is there a secondary market?
If the size of the ComboBond is large, it may be interesting to consider a secondary market with ISIN code and certification. In this case, you will need to count on approximately €5,000 to €10,000 per year for the listing and the certificates, provided that you find a market maker who will guarantee a minimum of liquidity. European Climate DB can help you with this.
Q. How is the revision of the variable interest rate?
European Climate DB carries out the calculations and the maturities for you.
Q. Do I need a label and how much does it cost?
For a ComboBond of less than € 1 million it is not necessary. If the amount is higher, it can be useful to have a label to attract international investors who do not know you well.
5. I want to invest in a project
Q. What are the projects?
The projects targeted by the ComboBonds must be part of official sustainable development lists such as the SDG's (UN), the Green Deal Taxonomy (Europe) or the list of projects authorized by the European Commission within the framework of the post-COVID-19 relaunch. European Climate DB will verify the correct use of the funds to avoid Greenwashing and will send you a certificate.
Q. How are they selected?
Projects are selected in two stages.
The first stage consists of analysing the reality of the project's positive impact on people or the environment.
The second consists of analysing the financial soundness of the project (credit analysis).
All this is carried out by a team supervised by the former Global Head of International Credit of a major bank who has been an expert in sustainable financing since 2015. The result of the analysis is communicated to you in an exhaustive information note.
It is then up to you to make your choice on the basis of this information.
Q. How do I know when a new ComboBond is released?
As soon as a new ComboBond comes out, interested parties who have registered here are given priority notice via a free subscription system. Others are notified via internet campaigns to complete the ComboBond if there are not enough subscribers.
Q. Can I invest in a municipal or city ComboBond?
Yes, this is possible even if you are not resident in the municipality in question. But it is obviously more interesting if it is in your own municipality because the authorities will communicate regularly with their citizens about the status of the works.
Q. How much can I invest?
With the 10/10 principle, it is generally accepted that you spread your risk.
Step 1: Calculate how much money is available that you will not need for 10 years. This is important because most ComboBonds are long-term investments and your money will be locked in for the entire period of the ComboBond (often between 5 and 10 years).
Step 2: spread your investment over 10 projects so that you reduce the risk if one of them does not go well. Of course, the risk of non-reimbursement can be reduced for example if the ComboBond is issued by a very strong government or company. This information is analysed and available in the information note.
Q. Is it risky?
The level of risk is, of course, specific to each transaction. That is why European Climate DB gives you a risk rating between 1 (least risky) and 5 (most risky) together with the credit analysis in the Information Note.
Q. How am I reimbursed?
Each ComboBond is attached with an appendix which describes your return and how much you will be reimbursed (amortization). This appendix is updated every year if the interest rate has passed a plateau.
Q. Can the interest rate go down?
No, it can only go up or stay at the same level.