LendInvest PLC (AIM:LINV, FRA:82H) has launched a bond that allows individual investors to lend directly to its property finance business.
It runs for six years, maturing in 2032, and is available from £1,000, with further multiples of £100.
It carries a fixed coupon rate of 8.00%, paid in two instalments per year. At maturity, holders are due to be repaid the full face value of their bond.
The return is funded by a pool of property loans, mostly UK buy-to-let, short-term and development mortgages that LendInvest originates and manages.
The bonds are secured by a floating charge over those loans, which gives holders a claim on the pool if the business fails.
LendInvest is also providing a partial guarantee covering 20% of the bonds.
The underlying mortgages are capped at a weighted-average 77.5% of property values, a measure known as the loan-to-value ratio.
As a corporate bond, it is not covered by the Financial Services Compensation Scheme, and investors' capital is at risk.
The bonds can be bought and sold on the open market through a stockbroker.
LendInvest said its underwriting had been applied to more than £9 billion of property lending since 2008.
The AIM-listed group reported funds under management of £5.48 billion in its latest update for the year to 31 March.
The issue is LendInvest's sixth sterling retail bond and is being led by Allia C&C.
Chief executive Rod Lockhart said it reflected appetite for direct access to an asset class traditionally dominated by institutions.
