Rare retail bond issue as Urban Exposure offers 6.5% p.a. due 2026

Specialist real estate development finance provider Urban Exposure Plc has announced the launch of a 6.5% secured sterling retail bond, maturing in 2026.

The company specialises in development finance loans to small and medium sized residential property developers with a proven track record and is listed on the London Stock Exchange’s AIM market.

Urban Exposure also provides development finance loans across the UK to experienced property developers for residential, mixed use, student accommodation, retirement living, and build-to-rent/PRS schemes; it also provides asset management services to third party institutions.
The bond, listed on the LSE’s Order Book for Retail Bonds will pay a fixed rate of interest of 6.5% per annum, paid semi-annually and available in an initial size of £2,000, then multiples of £100.

The bond is issued by Urban Exposure Finance Plc, a wholly owned subsidiary of Urban Exposure Plc the specialist residential development finance and asset management company; it is available to retail investors and are being issued by the company to originate loans which fulfil certain eligibility criteria, as more particularly described in the base prospectus dated 15 July 2019.

It is part of a £500,000,000 Euro Medium Term Note Programme guaranteed by Urban Exposure Plc.

Bonds issued under the programme are intended to be listed on the Official List of the UK Listing Authority, and be admitted to trading on the London Stock Exchange’s regulated market and through the electronic Order Book for Fixed Income Securities (OFIS).

The Bonds will bear a fixed rate of interest of 6.5% per annum; interest will be payable semi-annually in arrears in equal instalments.
At any time during the life of the Bonds, 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 Sole Lead Manager on this issue.

The Authorised Offerors are:
AJ Bell Securities Limited
Equiniti Financial Services Limited
Redmayne-Bentley LLP
The offer period is now open and is expected to close at 12pm BST on 30th July 2019; the lead manager retains the right to close the offer early, in conjunction with the Issuer

Tapping into the UK housing shortage

The company is hoping to tap into the expected demand for 300,000 new homes across the UK to keep pace with population growth as well a shortage of development finance.
It reckons that the demand from smaller housebuilders for finance outstrip supply due to the ‘dramatic reduction’ in traditional bank lending since 2007.
Although Urban Exposure are guaranteeing the bond, it will rely on covenants and first claim on the assets in the event of default, in order to pay back some of the loans.
Neither the bond nor the Urban Exposure holds a credit rating, the product will not be protected under the FCA’s financial compensation scheme.

The following base prospectus has been approved by the Financial Conduct Authority and is available for viewing:

Base Prospectus dated 15 July 2019 for the Urban Exposure Finance Plc

Urban Exposure Finance Plc Information Booklet

Urban Exposure Finance Plc Retail Bond Announcement

Urban Exposure Finance Plc – Retail Bond Final Terms and Summary

How to apply for bonds

You can apply for the Bonds via the following Authorised Offerors:

AJ Bell Securities Limited

Arnold Stansby & Co. Limited

Interactive Investor Services Limited

Redmayne-Bentley LLP

Saga Share Direct

Selftrade

Shareview

Any decision to purchase or sell the Bonds should be made solely on the basis of a careful review of the Base Prospectus dated 15 July 2019 together with the Final Terms dated 15 July 2019.