- WHAT IS A BOND?
A Bond is a debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate. Bonds are used by companies to raise money and finance a variety of projects and activities. Owners of bonds are debtholders or creditors, of the issuer.
Bonds are commonly referred to as fixed income securities and are one of the three main generic asset classes, along with stocks (equities) and cash equivalents.
- WHO IS THE ISSUER OF THESE BONDS?
They are being offered and issued by David Lloyd’s Developments M-B Ltd, a UK registered company.
- HOW ARE DAVID LLOYD’S DEVELOPMENTS M-B LTD BONDS DIFFERENT FROM LISTED BONDS OR GOVERNMENT BONDS?
David Lloyd’s Developments M-B Ltd Bonds are effectively a private borrowing agreement between the Company and investor that cannot be transferred to someone else. In contrast, retail corporate bonds and government gilt-edge securities are freely tradeable instruments. David Lloyd’s Developments M-B Ltd are not protected by the Financial Services Compensation Scheme. While safeguards are in place, the FCA is very clear that every investor should be aware that their capital is at risk.
- WHY DO COMPANIES ISSUE BONDS RATHER THAN BORROWING FROM A BANK?
When companies or other entities need to raise money to finance a new project or to maintain ongoing operations, there may issue bonds directly to investors instead of obtaining loan from a bank. Most companies can borrow from banks but view direct borrowing from a bank as more restrictive, less flexible, and often more expensive than selling debt to private investors through bond issues. With finance not being as freely available from traditional lenders, more and more businesses are turning to bond issues as a favourable alternative.
- HOW IS THE INVESTMENT SECURED?
Here is a floating charge in favour of the lender(s) which attaches to all the current and future assets of the company.
- IS THE BOND ADMINISTERED IN THE UK?
It is. The Bond Registrar, the Payment Agent, Investment Oversight and the Security Trustee are all UK registered professionals with the necessary credentials to carry out this work.
- WHO CAN INVEST?
Any individual who is over the age of 18, or a trust, company or charity that is not prevented by the laws of its governing jurisdiction from applying for or holding bonds. Investors must also fall within one of the following categories:
I. certified high net worth investors (as per COBS 4.7.9R);
II. certified sophisticated investors (as per COBS 4.7.9R);
III. self-certified sophisticated investors (as per COBS 4.7.9R); or
IV. certified restricted investors
We recommend all Investors speak an advisor who is authorised under the Financial Services and Markets Act 2000 and specialises in investments of this kind.
- WHAT HAPPENS TO THE INVESTMENT MONEY?
Subscription monies from the Bonds will be paid to a payment agent regulated by the FCA.
- HOW MUCH IS THE COMPANYHOPING TO RAISE?
Forty Million Pounds (£40,000,000).
- IS THERE A MINIMUM AMOUNTTO BE RAISED?
The minimum raise under the Bonds is Twenty Million Pounds (£20,000,000) and the maximum is Forty Million Pounds (£40,000,000). (the maximum an investor can invest is £40 million of all 6 per cent. or all 8 per cent, or a mixture to a maximum overall limit of £40 million).
- IS THERE A MINIMUM AND/OR MAXIMUM INVESTMENT I CAN MAKE?
The minimum you can invest is £100,000 and the maximum is £40,000,000.
- CAN I REDEEM MY INVESTMENT EARLY?
It is at the discretion of the Directors of the Company as to whether investors can redeem their Bonds early.
- DO I GET SHARES OR PROFITS IN DAVID LLOYD’S DEVELOPMENTS M-B LTD?
No. You will not get either. You are taking a Bond and Bonds do not participate in the share capital or dividends of the company.
- WHAT HAPPENS IF THE BONDS ARE FULLY SUBSCRIBED?
If this offering is fully subscribed, the Company will create a new series of Bonds and offer those to investors. The subscription value will depend on demand and the number of sites planned approved.
- WHAT WILL BE THE INTEREST ON NEW SERIES OF BONDS?
Any new Bonds issue will be at a lower rate of interest than what is being offered in this current bond.
- IS THIS A COLLECTIVE INVESTMENT SCHEME?
No, it is not. Debt issues, where the instruments are not convertible into or exchangeable for investments of any other description are excluded from the definition of a collective investment scheme under the Financial Services and Markets Act 2000 (Collective Investment Schemes) Order 2001.
- CAN I INVEST IF I AM NOT IN THE UK?
Yes, you can, but you may be affected by the laws of the country in which you live or of which you are a citizen. You are advised to consult a professional adviser prior to making any application. Unfortunately, US Persons and citizens of and residents of Canada, Australia, Japan, South Africa and Singapore are not eligible to take up investments.
- WHEN CAN I INVEST?
You can invest at any time, provided that the Directors have not closed the offering.
- WHEN DO I GET MY ORIGINAL INVESTMENT BACK?
All your original investment is expected to be returned in full at the end of the Term of the Bond (3 or 5 years).
- WHAT RETURNS DO I GET?
You will get paid interest (Coupon) at a rate depending on your investment value and bond of 6 per cent. or 8 per cent. per annum. Interest is calculated and paid quarterly in arrears on the Company’s Quarter date or compounded.
- HOW DO I GET MY INTEREST PAID TO ME?
You will be paid by bank transfer into the bank account you nominate. This bank account must be in your name or the name of your legal representative if you are not able to hold a bank account in your name.
- ARE THE BONDS TRANSFERABLE?
Yes, the Bonds are transferable, but the Company has no intention of providing a trading facility.
- CAN I SEE THE ONGOING PERFORMANCE OF THE BONDS?
Our Company results will be subjected to a full and independent audit and will be published at Companies House and made available upon request subject to directors’ discretion.
- CAN I PURCHASE THIS INVESTMENT THROUGH MY SIPP OR SSAS?
Yes, this investment can be included as part of your SIPP or SSAS, but usually at their discretion. The directors believe that this investment can be included as part of your SIPP or SSAS, but you should seek independent advice on the subject.
- CAN I INVEST AS A COMPANY AND ARE JOINT APPLICATIONS ALLOWABLE?
Yes, company investment or joint applications can be accepted.
- WHAT HAPPENS IF I CHANGE MY MIND?
If you wish to cancel your application, you should write to: David Lloyd’s Developments M-B Ltd 6th Floor 60 Gracechurch Street London, EC3V 0HR United Kingdom, which must be received no later than 7 days of the date of your application form or the date we received your application form whichever is the latest. After this date, your application will be irrevocable and will not be capable of being terminated or rescinded.
- IF I DIE WHAT WOULD HAPPEN TO MY BONDS?
Ordinarily bonds would normally form part of a Bondholder’s estate and title would pass to the executors or administrators of their estate, but each person’s circumstances are different so this might not apply in all cases.
- WHAT TAXES DO I NEED TO PAY?
For all information about tax, please see the section, “Tax” in this document.
- SHOULD I DISCUSS THISINVESTMENT OPPORTUNITY WITH A FINANCIAL ADVISOR?
We strongly recommend that you do.
- WHAT WILL THE BONDS BE SECURED AGAINST?
The Bonds will be secured against the underlying assets of the Company, including property, income and cash reserves by way of a fixed and floating charges against the Company. The charges will be contained in a Debenture, which is a legal security document incorporating charges to be taken over the assets and undertaking of the Company, and which security will be registered against the Company’s register at Companies House.
- THE SECURITY TRUSTEE
To protect Bondholders’ interests, the Trustee has been appointed to act as an independent trustee to hold the security on behalf of the Bondholders. If, for whatever reason, the Company defaults in making payments in respect of the Bonds, the Security Trustee will be able to enforce the registered charges over the Company’s assets, in order to realise their underlying value, and to direct that any proceeds of realisation are used to repay capital and interest due to Bondholders.
- THE BOND INSTRUMENT, TRUST DEED & SECURITY DEED
The Bonds being issued by the Company have been established under a bond instrument constituted by the Trust Deed dated 18th April 2019 between the Company and the Trustee.
The Trustee acts on behalf of the Bondholders holding the security and is responsible for enforcing such security to recover funds on behalf of Bondholders in the events of default by the Company. The events of default such as the delay or non-payment of coupons or redemption are defined within the Trust Deed a copy of which can be obtained on request by emailing firstname.lastname@example.org.
The Security Deed is the agreement between the Company and the Trustee that specifies the details of the security provided by the Company to the Trustee. A copy of the Security Deed can be obtained on request by emailing: email@example.com.
The Bonds being subscribed for under the terms of this IM are secured bonds. The Directors believe that the level of security ordered by the Company is a key element for all potential Investors and are of the opinion that they have structured the order of the Bonds to ensure that Investors are afforded adequate security by the Company to protect their interests.
- FINANCIAL BOND INDEMNITY
The Company has negotiated a Financial Bond which guarantees the investor coupon and bond repayment in an event of default by the Company but which excludes a default occasioned by the Company becoming insolvent in any manner.
- I HAVE MORE QUESTIONS – HOW CAN I GET THEM ANSWERED?
If you have any questions regarding the procedure for investment or payment, please contact the Company using the details below:
Telephone: 020 3930 3760
Please note: lines are open between 9am and 5.00pm, Monday to Friday. Alternatively, you can write to: David Lloyd’s Developments M-B Ltd
6th Floor 60 Gracechurch Street London, EC3V 0HR United Kingdom