Unlisted secured corporate bond targeting a 7% fixed return over 12 months term
Specialist investment manager Oxford Capital has announced the launch of its Residential Development Bond. It is a co-investment alongside Oxford Capital managed funds, allowing investors to leverage Oxford Capital’s due diligence and deal flow. Returns are generated by charging interest and fees on loans to smaller, but experienced UK house builders that are under-serviced by banks, but crucial to resolving the UK housing crisis. The bond issuer is experienced in lending to UK house builders through its activities for Oxford Capital’s Estate Planning Service (OCEPS). It has already lent £50 million and has several well-advanced projects.
Security is provided in the form of a debenture over the assets of the development projects, including the underlying land, and all of the construction work and materials on the site. This £1 million tranche is likely to be the first of a series with subscriptions sought from direct retail investors in multiples of £10,000.
Development finance expertise is provided by Aberclay Property Finance (the trading name of Aberclay Limited) and Clarke Willmott is the legal adviser for the development loans and the bond issuer. Gross development valuations for the current projects in the bond issuer’s portfolio are provided by Savills PLC.
Richard Roberts, Director of private clients at Oxford Capital, said, “We are very excited about bringing this offering to investors as it represents a real opportunity to earn an attractive return in a low interest rate environment, backed ultimately by bricks and mortar.”