Translator: flycrane01 Editor: Millman97
Li Yao stared at the exchange platform quickly and immediately understood. "So, the stronger a Cultivator is, the higher, say, his 'price', will be, right?"
Zhao Hongguang replied, "Theoretically, yes. But it is much more complicated in reality. The bond price has to do with the age, background, social connections, and the methods of dividends.
"For example, if a Core Formation Stage Cultivator is more than two hundred years old, his bond price wouldn't be too high however capable he is, unless he is very likely to enter the Nascent Soul Stage shortly. It is understandable. He is too old and has little potential.
"Another example. If a Cultivator makes a breakthrough but his competitor makes an even bigger one, the Cultivator's bond price will definitely plunge, too. After all, there can't be two tigers on the same mountain."
"One more example. If a Cultivator is not very strong but in desperate need of money. He grits his teeth and releases a batch of Cultivation Bonds at a price of a hundred dollars apiece, promising that he will offer twenty dollars as dividend per year. Naturally, it becomes a hit and the bond price will soar. But it will be a whole different story as to whether or not he can fulfil his promise at the end of the year.
"In other cases, the capability of a Cultivator remains unchanged, but he claims that he has found a new world fragment or a new area of space debris. It is not unusual for his bond price to rise multiple times.
"All in all, the market of Cultivation Bonds is the same as the stock market, where the sects that are running well do not necessarily have a high share price. Too many erratic factors are involved in the process. It is a boundless world soaked in immeasurable water.
"However, rest assured, Chairman Sand. The market of Cultivation Bonds is supervised by the 'Cultivation Securities Regulatory Commission', also known as the CSRC 1 . Releasing false news or conducting clandestine deals will be punished severely when discovered."
Li Yao nodded. He had heard about the Cultivation Bond before and knew that it was a mature, public, and legal financial product, but he had never found the time to study it.
According to the description, it did seem to be a great solution to raise funds for his personal training quickly.
Pondering for a moment, Li Yao raised another important question. "A sect must be strictly audited and monitored when it is to be listed. Is it also the case for a Cultivator?
"If a certain organization is supervising every sum of money I spend and my training progress in every field, that won't do."
Zhao Hongguang seemed to have expected Li Yao's concerns. He smiled casually and said, "Cultivators are different from sects. Most of them have top confidential secrets that they do not want anybody else to know. Our predecessors have thought of it since a long time ago.
"Allow me to elaborate. The Cultivation Bond is just a collective name. There are many categories below it.
"Some of the categories are obliged to release all the details to the public. After all, the ordinary investors are putting their lifelong savings into your hands. It's only natural that you answer for them, isn't it?
"After you raise enough money from the investors, you must tell the public what Heavenly Materials and Earthly Treasures you have bought, what kind of training you have done, and which level you are in on a regular basis. Monthly report, quarterly report, biannual report, and annual report are all mandatory.
"However, there is one other type of Cultivation Bond that does not require anything. As long as they are sellable, and the dividends are done according to the deal, it will be fine. You can do whatever you want with the money provided that the CSRC does not find any clues to associate you with crimes."
Li Yao was dazed. "The second type of bonds is rather risky. Who would buy that?"
Zhao Hongguang smiled. "High risk, high returns. The first type of Cultivation Bond, known as a transparent bond, is a steady investment. The dividend rate is low, and not many people are interested in them. The annual percentage rate is only slightly higher than the interest rate of banks.
"The second type of Cultivation Bond is better known as a free bond in the trade. It is indeed risky, but its returns are very high, too. If you are planning to release free bonds, Chairman Sand, you'd better be prepared to return three to four hundred dollars three years later for every hundred dollars you sell right now."
Li Yao thought for a moment. With the speed of the development of the Glorious Sunlight Group and his personal training, it would not be very much even if the loans were doubled three years later.
Zhao Hongguang continued. "Chairman Sand, there's no need to decide between the two. In fact, what most Cultivators release are combinative bonds. Part of their bonds are transparent, and the rest of the bonds are kept to themselves and fully at their own disposal.
"It's impossible that a Cultivator cannot reveal any of his techniques to the public, isn't it? He is definitely an evil Cultivator if so.
"For normal Cultivators, they naturally want to keep their core techniques a secret, but they are not afraid to reveal some of their rudimental techniques.
"The money you raise through the 'transparent bonds' can be used to train the public-accessible techniques, while you can train your core techniques with the money collected through the 'free bonds'.
"Other than that, you can also release 'oriented bonds'.
"For example, if you plan to study the 'Great King Kong Fist Art' today and you estimate the cost to be fifty million, you can release 'Great King Kong Oriented Bonds' with a worth of fifty million bringing your budget plan.
"You will make a deal with the investors that the fifty million you borrow today will be specifically used for the training of the Great King Kong Fist Art and won't be spent on anything else. You will show them what materials you are going to buy, which training chambers you are going to rent, how many tutors you are going to hire, and the total cost.
"If you grasp the Great King Kong Fist Art within five months, you will return the principal together with the dividends, and if you fail, you will return the principal back in a certain amount of time as dictated in the budget plan.
"Such oriented bonds are very popular among ordinary investors since they are simple, open, and barely risky although the interest rate is not high.
"You see, raising money by releasing combinative bonds and oriented bonds is both adaptive and convenient, and your secrets will be kept safe. Isn't it an excellent choice?"
Li Yao nodded in agreement.
Through such a mature method of fundraising, a huge amount of funds could be collected legally, efficiently, and peacefully. No wonder robbery was rarely-seen in the modern Cultivation world.
Reading the detailed information about the Cultivation Bonds, Li Yao furrowed his brow again and asked, "Manager Zhao, the release of Cultivation Bonds cannot be done in one day. They have to be approved by the CSRC. It will take at least a year and a half, give or take.
"Besides, it seems to me that you are not authorized to release Cultivation Bonds, are you?
"But I'm in dire need of money right now. It will be best if I can get it within the next half a month.
"Since you proposed a meeting today, I believe you've figured a solution to the problem?"
"Indeed, I have."
Zhao Hongguang did not waste any time and put forward the proposal without beating about the bush. "Releasing Cultivation Bonds is indeed not a business of the Cross Wind Union Bank, and even if we were to submit a release proposal right now, it would not be approved for quite some time.
"However, the Cross Wind Union Bank and the important sects in the Cross Wind Space Zone have high hopes for Chairman Sand. We believe that your Cultivation Bonds will be released successfully one day, and that their price will soar after they are.
"Therefore, we would like to propose a deal with Chairman Sand. We will purchase a certain number of your unreleased Cultivation Bonds in advance. Or in other words, you will receive a huge loan with your future Cultivation Bonds as collateral."
Zhao Hongguang pushed a jade chip over solemnly and said, "This is our proposal. Please take a look, Chairman Sand."
Li Yao inserted the jade chip into the crystal processor and browsed through the clauses. He then looked at Zhao Hongguang again and said, "The amount of the loan is indeed impressive, but the interest rate is even more impressive!
"Chairman Zhao, the Glorious Sunlight Group is now in the golden phase. It will be more than quadrupled in the next few years.
"As for myself, I have profound connections on Iron Plateau, too.
"In the meantime, I'm the sole owner of the patents for the Combat Ability Detector and the joint owner of the patents for the Aurora Chain Gun. You should know the value of the two kinds of magical equipment very clear.
"I don't think I need to brag about my personal strength.
"Investing in me has a low risk and high returns. Such a high interest rate is beyond my expectation."
Zhao Hongguang smiled and looked at Master Heavenly Eye.
Master Heavenly Eye had remained silent the whole time as if he were forged of iron. He opened his mouth for the first time, and his voice was like the sound of running gears, completely devoid of any emotions.
"Chairman Sand, in the circle of 'evaluators', it is a common practice to divide the credit level and risk level of a Cultivator or a sect into eight classes.
"The highest class represents the brightest prospect with endless potential and barely any risk. Cultivators or companies in this class are absolutely worth investing in.
"Therefore, Cultivators and companies in the highest class can raise a huge sum of money at a very low cost. Their interest rate is also the lowest.
"But as for you, you are now evaluated to be in the fifth class by the Heavenly Eye Sect. It is our opinion that investment in you can yield enormous returns but with considerable risk. Therefore, we suggest that the institutions invest cautiously, and the individual investors keep their distance."
"Oh?" Li Yao leaned back in his chair. He grew interested and asked, "What are my risks?"
Master Heavenly Eye replied, "You have concluded your advantages very well. I do not need to repeat them.
"In the evaluation report of the Heavenly Eye Sect, you have two main risks.
"Firstly, it is our understanding that your combat style is different from common Cultivators. In the multiple competitions in Flying Star University, you have performed the technique of vaporizing spiritual liquids more than once, and your Cultivation is much higher than the usual peak of the Building Foundation Stage."
Li Yao sniffed but did not deny it.
Emotionlessly, Master Heavenly Eye continued. "Surpassing the peak of the Building Foundation Stage, your next step will be the Core Formation Stage. Entering the Core Formation Stage is a dangerous process. One might be mentally deranged and lose part of their Cultivation should they be careless.
"Since your training methods are different from normal, we estimate that the risk of you breaking into the Core Formation Stage is much higher than the risk of common Building Foundation Stage Cultivators.
"This is the first risk that we must remind the investors of.
"Secondly, assassination from the Temple of Immortals.
"According to various sources, you now rank the 14th on the must-kill list of the Temple of Immortals, which is a place much higher than most Core Formation Stage Cultivators.
"If you are indeed assassinated, even with the compensation of insurance companies, the investors will still suffer a huge loss.
"Considering the two risks, we can only set your credit level to be the fifth class despite your tremendous potential."