Specialist lender LendInvest issues retail bond £5.25% due 2022
Specialist mortgage lender LendInvest is looking to raise £50 million by issuing a five-year retail bond offering 5.25%, to diversify its funding and engage a broader range of investors.
The sterling-denominated fixed-rate bonds pay coupon twice a year and are issued by LendInvest Secured Income, a wholly-owned subsidiary listed on the London Stock Exchange.
They will supplement LendInvest’s existing funding sources, which include two funds overseen by LendInvest Capital and four dedicated funding lines facilitated by UK and international institutions including Macquarie Group and a leading UK challenger bank.
LendInvest closed its online platform to retail investors in May targeting only high net worth investors, self-certified sophisticated investors, investment professionals and corporate investors.
This new issue opens up its property investment opportunities to individuals again; the offer period is expected to close at noon on the 4th of August although recent issues have proven very popular causing the lead manager – in this instance Peel Hunt, to close the book early.
Authorised distributors of the bond are AJ Belll Securities, Equiniti Financial Services and Redmayne Bentley; the minimum subscription is £2,000 with maturity set for 2022.
‘opening up property finance as an investable asset class’
In announcing the issue, Christian Faes, co-founder and chief executive of LendInvest said ‘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.’
Managing Director of LendInvest Capital, Rod Lockhart, said that the bond is launching at a ‘critical time’ for the UK’s residential property sector, adding ‘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.’
LendInvest had applied to the Financial Conduct Authority to operate a peer-to-peer lending platform, although the application has now been withdrawn; it is thought that the company will remain a member of the Peer-to-Peer Finance Association.
LendInvest provides finance to property professionals, and a platform for individuals and institutions to invest in property backed loans; it was founded with the mission to make mortgages better – whether making it easier to get a loan, providing funding to underserved borrowers, or opening up property finance as an investable asset class.
Since 2008, investors – from individuals through to multinational institutions – have invested almost £1 billion in loans to borrowers who have bought, built or renovated over 2,700 properties worth in excess of £1.4 billion in 120 UK towns and cities.
Launched shortly after the financial crisis, by 2012 it had launched two regulated funds to finance its loans, and was managing £30 million of investors’ capital and was one the leading short-term finance lenders in the UK.
LendInvest’s online investment platform launched in 2013, enabling investors to build their own tailored portfolios of investments in short-term property finance.
LendInvest Capital is the dedicated funds management and advisory division of LendInvest which has raised almost £40million in funding for the company since 2015.