Wellesley Mini-Bond: Frequently asked questions
Bondholders invest their money directly with Wellesley Finance Plc in return for a fixed rate of interest paid monthly or at Maturity. At Maturity of the Wellesley Mini-Bond, if you so choose, the full amount of your investment will be repaid. The Wellesley Mini-Bond is issued by Wellesley Finance Plc, an unregulated and distinct legal entity from Wellesley & Co Limited. Both Wellesley Finance Plc and Wellesley & Co Limited are subsidiaries of Wellesley Group Limited.
Some of the uses to which the proceeds of the Wellesley Mini-Bonds may be put would include, but are not limited to, the following:
- ‘co-investment’ in property loans alongside Peer-to-Peer investors;
- in respect of Series 3 Wellesley Mini-Bonds issued on or after the Amendment Date, funding losses, i.e. to supplement the funds Wellesley Finance Plc has committed to allocate for the restoration of customer investments – on a discretionary, loan-by-loan basis – in the event of a default; and
- inter-company funding, i.e. the provision of funds to wholly-owned subsidiaries of Wellesley Group Limited.
The Wellesley Finance Plc Mini-Bond is a separate form of investment to Wellesley & Co Limited’s Peer-to-Peer product, with different terms and conditions. The Mini-Bond is issued by Wellesley Finance Plc, an unregulated and distinct legal entity from Wellesley & Co Limited. Both Wellesley Finance Plc and Wellesley & Co Limited are subsidiaries of Wellesley Group Limited.
The minimum investment is £100, and thereafter in multiples of £10.
We are required to apply a withholding tax at the basic rate of income tax (currently 20%) on all payments of interest made to any individual investor. We will arrange for the tax due on payments of interest to be deducted from the interest payment made to each investor and will pay any such amounts to HMRC on your behalf. An individual investor who is subject to basic rate income tax should not be liable for additional income tax in respect of the Wellesley Mini-Bonds. A Bondholder who is not normally subject to income tax in the UK may be entitled to claim repayment of the tax withheld at the basic rate by Wellesley Finance Plc from HMRC. As an example, an investor who places £5,000 in Wellesley Mini-Bonds and is liable to basic rate income tax should expect to receive the following return:
* If you choose to receive your interest at Maturity of your Wellesley Mini-Bond, this will mean that interest is rolled up and will be paid to you upon repayment or redemption of your relevant Wellesley Mini-Bond. By way of example, if you held a 4 Year Bond and chose to be paid interest at Maturity, and notified Wellesley of your intention to redeem your Wellesley Mini-Bond to take effect one year after the initial 4 year fixed-term, interest would be paid to you upon that redemption date (i.e. the 5th anniversary that your 4 Year Bond was issued to you).
We will provide the recipient of the interest payment with an annual electronic statement showing the gross amount of the interest payment, the amount of income tax deducted from the interest payment, and the actual amount of interest paid. All investors who are or may be liable to tax, especially higher rate taxpayers in the UK, or those who may be required to pay tax in non-UK jurisdictions, should consult their independent financial advisers since further tax may be payable in some cases.
The Wellesley Mini-Bond is available to UK-based individuals, companies, charities and trusts (subject to the restrictions below). It may be placed in a Self-Invested Pension Plan (SIPP), subject to the investment policy and procedures of the SIPP provider. The Wellesley Mini-Bond is only available to the limited class of persons listed in FCA COBS Rule 4.7.7 being (a) certified as a ‘High Net Worth Investor’, (b) certified as a ‘Sophisticated Investor’, (c) self-certified as a ‘Sophisticated Investor, or (d) certified as a ‘Restricted Investor’. The requirements for these classifications are set out in full in FCA COBS Rules 4.7 and 4.12 and are briefly described below:
- High Net Worth Investor; you earn more than £100,000 a year or have net assets of more than £250,000. Net assets for these purposes do not include:
- the property which is your primary residence or any money raised through a loan secured on that property;
- any rights under a qualifying contract of insurance; or
- any benefits (in the form of pensions or otherwise) which are payable on the termination of your service, or on your death or retirement, and to which you (or your dependants) are, or may be, entitled.
- Sophisticated Investor: a ‘Sophisticated Investor’, sometimes referred to as an ‘Advised Investor’, is someone who has an FCA regulated adviser, perhaps an Independent Financial Adviser (IFA), and will receive advice from them about each investment they make. You will need to confirm that you are a client of a firm that has assessed you as suitable to receive financial promotions. You accept that the investments to which the promotions relate may expose you to a significant risk of losing all the money or other property you have invested. You are aware that it is open to you to seek advice from an authorised person who specialises in advising on unlisted shares and unlisted debt securities
- Self-Certified Sophisticated Investor: You will need to confirm that you are a Self-Certified Sophisticated Investor if at least one of the following applies:
- you are a member of a network or syndicate of business angels and have been so for at least the last six months prior to the date hereof;
- you have made more than one investment in an unlisted company in the two years prior to the date hereof;
- you are working, or have worked, in the two years prior to the date hereof in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises; or
- you are currently, or have been in the two years prior to the date hereof, a director of a company with an annual turnover of at least £1 million.
- Restricted Investor: you confirm that you will not, in the next 12 months (and have not in the previous 12 months), invested more than 10% of your net assets in investments which are “non-readily realisable securities”.
- “non-readily realisable securities” include stocks, bonds and shares in companies which cannot easily be sold. These include shares and bonds in private companies and in public companies that are not traded on the Main Market of the London Stock Exchange. The Wellesley Mini-Bond falls within the definition of “non-readily realisable securities”.
- “net assets” for these purposes exclude your primary residence (and any money raised through a loan secured on this property), the value of any life insurance or assurance policy, and the value of any pension plan or permanent health insurance plan. Hence, broadly speaking, net assets for these purposes include savings in banks and building societies, and savings in the form of direct holdings of shares in companies traded on the Main Market of the London Stock Exchange or holdings in unit and investment trusts.
By way of example, if you have cash saved in a building society totalling £25,000 and savings in a unit trust totalling £75,000 at the date at which you invest in the Wellesley Mini-Bond and, in the previous 12 months, you have not invested in a similar mini-bond issue, or in any shares in private companies or companies quoted on a stock market other than the Main Market of the London Stock Exchange, you will be deemed to have net assets for the purposes of investing in Wellesley Mini-Bonds of £100,000 and so you can invest up to £10,000 in Wellesley Mini-Bonds, but cannot invest further in such mini-bonds, or other non-readily realisable securities, in the next 12 months
No, these are long term investments and you would be very unlikely to get your money back early.
However, Bondholders may submit a written request providing the reason for the request to Wellesley Finance Plc, and all such requests can only be made after the first anniversary of the bond.
As advised in the terms, the Company will be under no obligation to accept your request for early redemption and therefore you should only invest in Wellesley Mini-Bonds if you are prepared to invest your money for the full initial fixed term.
Should your request be approved no interest will be paid for the invested term, and any interest that has already been paid will be deducted from your capital.
Early bond closure requests will be permitted in exceptional circumstances only.
To redeem your Wellesley Mini-Bonds, simply log in to your online Wellesley account and click the “Give Notice” button next to the relevant Mini-Bond. You will need to provide notice of redemption at least six months prior to the redemption date (being the end of the initial fixed term or a subsequent anniversary of the issue of your Wellesley Mini-Bonds).
The Company will e-mail you prior to the six-month deadline for redemption to remind you of the date by which you will have to submit your completed notice of redemption. Until a completed notice of redemption is received, your holding of Wellesley Mini-Bonds will automatically continue and be capable of redemption by returning your notice of redemption at least six months prior to the anniversary of the issue of the Wellesley Mini-Bonds.
By way of example, if you held a 4 Year Bond and notified Wellesley of your intention to redeem your Wellesley Mini-Bond six-months prior to the 4th anniversary of your Bond, your capital and any interest will be repaid on the redemption date of your initial fixed 4 Year Bond. If you do not provide Wellesley with a redemption notification, your Bond will roll over for another year.
Wellesley will then contact you prior to the six-month deadline for the subsequent anniversary of your initial fixed 4 Year Bond. If you notify Wellesley of your intention to redeem (prior to the six-month deadline), your capital and any interest will be paid to you upon that redemption date (i.e. the 5th anniversary that your 4 Year Bond was issued to you).
All interest is paid net of basic rate tax calculated at 20%. The Wellesley Mini-Bond is non-transferable and cannot be sold or traded. Bondholders may submit a request to Wellesley Finance Plc that their Wellesley Mini-Bond be repaid early, however all such requests are subject to liquidity and are considered at the discretion of the company’s management.
Before you subscribe for any Wellesley Mini-Bonds, you should make sure that you fully understand the risks which are set out in the Invitation Document and you should determine whether the investment is suitable for you on the basis of all the information contained in the Invitation Document. In the event that Wellesley Finance Plc becomes insolvent, you may lose some or all of your investment. If you are in any doubt about the contents of the Invitation Document or the action you should take, you are strongly recommended to consult a professional financial advisor. Investment into Wellesley Mini-Bonds is not protected from loss by the Financial Services Compensation Scheme (FSCS).
The Wellesley Mini-Bonds are issued by Wellesley Finance Plc, a company incorporated in England and Wales with its registered office at 6th Floor, St Albans House, 57/59 Haymarket, London SW1Y 4QX. The information contained in this webpage which relates to Wellesley Mini-Bonds has been approved as a financial promotion for UK publication by BDO LLP, 55 Baker Street, London W1U 7EU (FRN: 229378) which is authorised by the Financial Conduct Authority to conduct investment business.
Wellesley Finance Plc is not regulated by the Financial Conduct Authority and does not offer any regulated services. Wellesley Finance Plc (no. 08331511) is registered in England and has its registered office and trading address at St Albans House, 57/59 Haymarket, London SW1Y 4QX, UK.
The Wellesley Property Bond is issued by Wellesley Secured Finance Plc (10565816) whose registered office is at 35 Great St. Helen’s, London EC3A 6AP. The information contained in this webpage which relates to the Wellesley Property Bond financial promotion has been approved for the purpose of section 21 of the Financial Services and Markets Act 2000 by The Share Centre Limited. The Share Centre Limited is authorised and regulated by the Financial Conduct Authority and is entered in the register under 146768.
Wellesley Finance Plc is part of Wellesley Group Limited.
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