USD Property-Backed Loan Note — 18 Month

What Is a Property-Backed Loan Note?

A loan note is a private debt instrument through which the investor lends capital to a borrowing company — in this case a UK property development firm — for a fixed term, in exchange for a fixed interest rate. This note pays 9.5% per annum fixed interest, with interest distributed quarterly (2.375% per quarter on invested capital), and the full principal repaid as a bullet payment at the end of the 18-month term.

Unlike a bank deposit or listed bond, loan notes are not exchange-traded. They are private credit instruments, and the investor's primary recourse if the borrower defaults is through the security arrangements described below.

Security Structure

This note is secured against the underlying UK property development assets via a fixed and floating charge over the assets of the issuing company, registered at Companies House. In the event of a default by the borrower, the charge trustee (an independent security trustee on behalf of noteholders) may appoint a receiver to realise the secured assets and distribute proceeds to noteholders.

Security is also supported by a personal guarantee from the principal directors of the development company, providing noteholders with recourse against the individuals responsible for the development in addition to the company assets.

It is important to understand that security does not guarantee recovery of capital. The value of property development assets fluctuates with market conditions, planning risk, and construction progress. In a distressed sale or forced realisation scenario, the security value may be less than the outstanding noteholder obligations — particularly in early stages of development when land has been purchased but build value has not yet been created.

Risk Factors

Development risk: The borrower's ability to repay the note is dependent on the successful completion and sale of the development project. Delays, planning refusals, cost overruns, or adverse property market conditions could impair the borrower's ability to service interest or repay principal.

Liquidity risk: This note has no secondary market. Once invested, your capital is committed for the full 18-month term. There is no mechanism to sell or transfer the note prior to maturity. Do not invest capital that you may need to access within 18 months.

Subordination risk: Investors should understand whether this loan note is senior or subordinated to any bank development finance in the capital structure. Senior bank debt would rank ahead of noteholders in any insolvency. Confirm the position in the capital structure from the full information memorandum before investing.

Currency risk: This note is denominated in USD. The underlying property development assets are located in the UK and the borrower's revenues will be in GBP. The borrower carries the currency risk of servicing USD-denominated debt from GBP revenues. This is an additional risk factor that is not present in GBP-denominated property loan notes.

Quarterly Interest Payments

Interest of 2.375% per quarter (9.5% per annum) is paid to each noteholder's nominated bank account on a quarterly schedule from the note issue date. Interest payments are not conditional on the development reaching any particular milestone — they are contractual obligations of the issuing company from the date of subscription. The first interest payment falls approximately 90 days after subscription is accepted.

Who Should Consider This Note

This note is suitable for sophisticated or high-net-worth investors who: understand private credit and the risks of property development finance; can commit capital for the full 18-month term without needing liquidity; are seeking a fixed, above-market income yield significantly above deposit rates; have diversified this investment across a broader portfolio and are not concentrating excessive capital in a single loan note.

How to Enquire

Contact our investment team to receive the full information memorandum, security trust deed, borrower financial information, development overview, and independent property valuation report for this note. We conduct due diligence on all loan note opportunities before presenting them to clients and can discuss the security structure, borrower background, and development timeline in detail.

Sophisticated Investors Only: This loan note is available to sophisticated investors and high-net-worth individuals as defined under applicable financial promotion regulations. It is not suitable for retail investors. Independent financial advice is strongly recommended before investing in loan notes of this type. Capital is at risk.