LendInvest launches first retail bond for secured property loans

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Christian Faes

LendInvest Limited (“LendInvest” or the “Company”), the UK’s leading marketplace for property lending and investing, announces the proposed issue of sterling-denominated 5.25% Fixed Rate Notes due 2022 (the “Bonds“) by its wholly-owned subsidiary, LendInvest Secured Income plc (the “Issuer”). Payments under the Bonds will be irrevocably and unconditionally guaranteed by LendInvest and the Bonds will be secured by way of a floating charge over all of the over the whole of the undertaking and all property, assets and rights, both present and future, of the Issuer.

LendInvest has a distinctive lending model that aims to create a cleaner, quicker and more flexible borrower experience for professional property investors and developers. Leveraging its team’s mortgage underwriting experience, loan servicing track record, and its proprietary technology-enabled tools and processes, the Company believes it is able to match the demands of professional bridging finance borrowers, who frequently require rapid turnaround times. LendInvest believes it has filled a funding gap in the UK’s mortgage market. As at 31 March 2017, the total principal amount of loans provided by the Group since it commenced operations in 2008 (excluding extensions) was £811.34 million. 

LendInvest is equally innovative in the way it funds its loans, making diversification of funding sources a fundamental tenet of its strategy for business stability and growth. As of 31 March 2017, LendInvest was managing and advising on £412.5 million of facilities on behalf of a range of UK and international investors that invest in the loans it originates across three main entry points: an online investment platform for high net worth investors, self-certified sophisticated investors, investment professionals and corporate investors; two funds overseen by LendInvest Capital, the Company’s fund management and advisory division which manages assets on behalf of private clients, wealth managers and institutions; and four dedicated funding lines facilitated by UK and international institutions including Macquarie Group and a leading UK challenger bank. Proceeds of the retail bond issue will constitute a fourth funding source.

In its latest financial year (ended 31 March 2017) LendInvest reported strong gross revenue growth and remained profitable, while investing significantly to support the business’s growth. Total annual lending continued to grow throughout the year, reaching £286 million excluding extensions.

The net proceeds of the issue of the Bonds will be used by the Company to fund the origination and/or purchase of loans which satisfy certain eligibility criteria*.

Christian Faes, pictured, Co-founder and CEO of LendInvest Limited, commented:

“In an era of record low interest rates coupled with constrained bank lending, LendInvest has developed a unique and compelling proposition for borrowers, through speed of execution and increased efficiency, and for investors, by offering access to a much sought after asset class delivering compelling returns. As we continue to scale the business, we’re increasingly looking to diversify our funding model and expand our capacity to lend to underserved borrowers, as well as to create new entry points to an attractive asset class that suits a broader range of investors seeking competitive risk-adjusted returns. The launch of this Bond allows us to achieve both of these ambitions, supporting future growth goals.”

Rod Lockhart, Managing Director, LendInvest Capital, added:

“Our debut retail bond is launching at a critical time when demand in the UK’s residential property market continues to outstrip supply. The retrenchment of traditional lenders from short-term or small-scale property financing has created a fundamental lack of capital for professional property investors, but also an opportunity for competitive alternative lenders like LendInvest. We want to support more professional borrowers through our tried and tested model and excellent track record and the Retail Bond creates a whole new funding source which enables us to do so.”

The Bonds bear interest from and including the date of issue at a fixed rate of 5.25% per cent. per annum, payable semi-annually in arrear in equal instalments of £2.625 per £100 in principal amount of the Bonds on 10 February and 10 August in each year. At any time during the life of the Bond, investors are permitted to sell the Bonds (within market hours and in normal market conditions) on the open market through their stockbroker.

Peel Hunt LLP is acting as Lead Manager on this issue.

LendInvest was advised by Simmons and Simmons LLP.

The Bonds have a minimum initial subscription amount of £2,000 and are available in multiples of £100 thereafter. The offer period opened on 19 July 2017 and is expected to close at 12 noon (London time) on 4 August 2017. The Lead Manager retains the right to close the offer early, in conjunction with the Issuer and LendInvest.

The Bonds are expected to be listed on the UK Listing Authority’s Official List and admitted to trading on the London Stock Exchange’s regulated market and through the electronic Order Book for Retail Bonds.

The authorised offerors are:

·       AJ Bell Securities Limited

·       Alliance Trust Savings Limited

·       Barclays Bank

·       Equiniti Financial Services Limited

·       Interactive Investor

·       Redmayne-Bentley LLP

·       Syndicate Room