LendInvest, the UK property lender, is aiming to raise £50 million through the issue of its first retail bond.
The London-based firm said that the capital markets issuance will contribute to the further diversification of its funding sources, which also include an online platform, a private funds business and bank credit lines.
“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,” commented Christian Faes, the firm’s co-founder and CEO.
The sterling-denominated, fixed-rate notes will be priced at 5.25 percent and will mature in 2022, LendInvest announced. The net proceeds will be used to fund the origination, as well as the purchase, of loans which fit its eligibility criteria.
The bonds will be issued by subsidiary LendInvest Secured Income and will be guaranteed by the parent company, secured by way of a floating charge over the issuer’s assets. Peel Hunt is acting as lead manager and the offer period is due to close on 4 August 2017.
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.
Its online platform is open to high-net-worth investors, self-certified sophisticated investors, investment professionals and corporate investors. The firm’s fund management division, LendInvest Capital, manages two funds on behalf of private clients, wealth managers and institutions. In addition, LendInvest has four dedicated funding lines provided by UK and international institutions including Macquarie Group and a UK challenger bank.
In the year to 31 March 2017, LendInvest lent £286 million excluding extensions. At that date, the total principal amount of loans provided by the group since it commenced operations in 2008, excluding extensions, was £811.34 million.
“Our debut retail bond is launching at a critical time when demand in the UK’s residential property market continues to outstrip supply,” said Rod Lockhart, managing director of LendInvest Capital.
“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,” Lockhart added.