Investors seeking income will be pleased to learn that peer to peer lender LendInvest has announced the launch of its second secured retail bond on the LSE’s Order Book for Retail Bonds, paying 5.375% in interest annually, until it matures in 2023.

LendInvest allows individuals to loan their money to finance property projects; the company offers bridging finance, buy to let and development finance.

The company’s first retail bond raised £50m last August offering  5.25% and maturing in 2022; it currently trades at 100p (par) on ORB’s secondary market, having peaked at 103p.

LendInvest’s first bond was 99.6% utilised, with an interest coverage ratio of 192% and a weighted average loan-to-value ratio of 57%.

The bonds have a minimum investment of £2,000 and are available in multiples of £100 thereafter; interest is paid semi-annually in arrears and investors are able to sell the bonds at any time within market hours via their stockbroker.

The bond is being issued by LendInvest Secured Income, a subsidiary of LendInvest. The bonds will be secured against the assets of LendInvest Secured Income, which will include any loans that are made by LendInvest using the money raised.

Michael Smith, of specialist consultancy Bondinvest Capital, explained that in the event Lendinvest went bankrupt, this security would lead to ‘some form of recovery for investors in the retail bond, which is a good thing’.

The bonds are expected to qualify for inclusion inside investors’ ISA accounts; unlike the risks associated with investing in unregulated so-called mini-bonds, to date there has never been a default among listed retail bonds, although they are not covered by the Financial Services Compensation Scheme.

Peel Hunt LLP is acting as Lead Manager on the issue; Authorised Distributors are Equiniti Financial Services Limited, AJ Bell Securities Ltd, iDealing ltd and Redmayne-Bentley LLP.

The offer period is now open and is expected to close at or before 12 noon GMT on 29th March 2018. The Issuer retains the right to close the offer early, in conjunction with LendInvest and the Lead Manager.

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 through the electronic Order Book for Retail Bonds.

Christian Faes, Co-founder and CEO of LendInvest Limited, commented: ‘We are delighted to be coming back to the market so soon after the successful issue of our first oversubscribed bond in August 2017. Our marketplace platform provides access to our loans to an extremely wide universe of investors, and our retail bonds make up an important channel for both retail and institutional investors alike. LendInvest provides investors with the opportunity to invest in a portfolio of loans that are all secured by property, at conservative LTV’s, and backed by an unrivalled 10-year track record.

‘Banks and other traditional lenders continue to retrench from property lending, constrained by increasing capital adequacy requirements and other limiting factors. This scenario shows no sign of changing and exacerbates the lack of capital available to professional property investors and developers trying to run their businesses around the country. The door is open for alternative lenders, like LendInvest, to be highly competitive in this space.’


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