Residential property developer Rectory Homes has launched the ‘Rectory Homes Bond’, a secured five year fixed-term corporate mini-bond offering investors 6.25% gross interest per annum.
The bond is the first of its kind to be offered by a UK new homes developer.
Rectory Homes has been building high quality homes in the South East of England for over twenty years. During the financial year ended May 2014 the Company grew its sales by 34% from GBP12.8 million in the financial year ended May 2013 to GBP17.1 million, and EBITDA by 74% from GBP1.69 million to GBP2.95 million. The Company currently has a number of option agreements in place which, if planning permission is granted, will lead to the development of an estimated 210 to 270 homes across nine sites.
The Company is seeking to raise up to GBP7 million through the bond issue, with the potential to rise to up to GBP10 million (subject to investor demand). The funds raised will be used to expand the business, with approximately 80% of the proceeds being used to invest directly in new development sites in the South East of England.
The minimum initial investment per applicant is GBP500 and thereafter further Rectory Homes Bonds can be applied for in multiples of GBP100. The bonds are eligible for investment by a UK Self Invested Personal Pension (SIPP) (subject to the rules of the relevant SIPP) but not for Individual Savings Accounts (ISAs) and are non-transferable. The Rectory Homes Bonds will rank ahead of any unsecured debt obligations of the Company.
To participate in the bond issue, investors can apply through the online application process or by contacting Rockfire Capital, registrar to the bond manager. The offer period is open from 23 February 2015 until 1:00pm on 23 March 2015 but may close early if the GBP10 million maximum is reached before the end of the period.
Simon Vickers, Executive Chairman, Rectory Homes, says: “The launch of the Rectory Homes Bond marks a momentous point in the Company’s development. Our strategic focus on premium developments in the South East has served the Company well and the Rectory Homes Bond now provides the opportunity for investors to become part of our growth story.”