Wellesley Property Mini-Bond: Frequently asked questions
The Wellesley Property Mini-Bond, issued by Wellesley Finance Plc, offers you the opportunity to invest directly into property backed loans made by Wellesley. Subscribed funds are lent to property developers whose loans are secured against residential property. In return, investors receive competitive returns of up to 6.00% per annum gross, with interest paid out monthly or at the maturity of the Bond. Interest earned on the Wellesley Property Mini-Bond is not compounded.
The Wellesley Property Mini-Bond is a retail bond which invest exclusively in Wellesley Finance Plc’s asset-backed lending business. The funds you subscribe to the Property Mini-Bond are lent to UK property developers – both small businesses and individuals – and those loans are secured against tangible assets consisting mainly of UK residential property.
The Wellesley Property 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 Property 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 Property Mini-Bonds and is liable to basic rate income tax should expect to receive the following return:
|Gross||Tax Withheld||Net Received|
|Wellesley 1 Year Property Mini-Bond||Monthly Interest||2.95%||£147.50||£29.50||£118.00|
|Wellesley 2 Year Property Mini-Bond||Monthly Interest||3.85%||£192.50||£38.50||£154.00|
|Wellesley 3 Year Property Mini-Bond||Monthly Interest||4.65%||£232.50||£46.50||£186.00|
|Wellesley 5 Year Property Mini-Bond||Monthly Interest||5.25%||£262.50||£52.50||£210.00|
* If you choose to receive your interest at maturity of your Wellesley Property Mini-Bond, this will mean that interest is rolled up and will be paid to you upon repayment or redemption of your relevant Wellesley Property Mini-Bond. By way of example, if you held a 5 Year Bond and chose to be paid interest at maturity, and notified Wellesley of your intention to redeem your Wellesley Property Mini-Bond to take effect one year after the initial 5 year fixed-term, interest would be paid to you upon that redemption date (i.e. the 6th anniversary that your 5 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 Property 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 Property 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.
- Everyday Investor (otherwise known as a 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 Property 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 Property 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 Property Mini-Bonds of £100,000 and so you can invest up to £10,000 in Wellesley Property Mini-Bonds, but cannot invest further in such mini-bonds, or other non-readily realisable securities, in the next 12 months
To redeem your Wellesley Property Mini-Bonds, simply log in to your online Wellesley account and click the “Give Notice” button next to the relevant Property Mini-Bond. You will need to provide notice of redemption at least six months prior to the redemption date (being the end of the applicable initial fixed term). Bondholders will receive their investment in full six months after they complete their notice of redemption (provided that the six-month notice expires after the relevant initial fixed term).
The Company will e-mail you prior to the six-month deadline for redemption to remind you of the date (end of the initial fixed term) by which you will have to submit your completed notice of redemption. Until a completed notice of redemption is received, your holding of Wellesley Property Mini-Bonds will automatically continue and be capable of redemption by returning the notice of redemption on the reverse of your Certificate.
By way of example, if you held a 4 Year Bond and notified Wellesley of your intention to redeem your Wellesley Property Mini-Bond six-months prior to the 4thanniversary of your Bond, your capital and any interest will be repaid on the redemption date of your 4 Year Bond. If you do not notify Wellesley prior to the 4thanniversary of your Bond, your Bond will roll over for another year.
If you notify Wellesley of your intention to redeem one month on from the 4th anniversary of your Bond, your capital and interest will be repaid six-months from the date Wellesley receives your notification of redemption.
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 Property 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.
All interest is paid net of basic rate tax calculated at 20%. The Wellesley Property Mini-Bond is non-transferable and cannot be sold or traded. Bondholders may submit a request to Wellesley Finance Plc that their Wellesley Property Mini-Bond be repaid early, however all such requests are subject to liquidity and are considered at the discretion of the company’s management.
Investment through Wellesley involves lending to individuals or companies and therefore your capital is at risk and interest payments are not guaranteed if the borrower defaults. It is important to remember that historic loan default rates are not necessarily indicative of future default rates. Wellesley Secured Finance Plc (the Issuer) was established as a special purpose vehicle for the sole purpose of issuing asset backed securities. Wellesley Secured Finance Plc is not part of Wellesley Group Limited. Wellesley Secured Finance Plc is not authorised or regulated by the Financial Conduct Authority. Wellesley Secured Finance Plc are not covered by the Financial Services Compensation Scheme (FSCS).
The Wellesley Property 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 and Wellesley Property 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.
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 is the singular name for the following collective of companies, Wellesley Group Limited (09811856), Wellesley & Co Limited (07981279) and Wellesley Finance Plc (08331511). Wellesley & Co Limited is authorised and regulated by the Financial Conduct Authority (FCA) under interim permissions (Registration Number IP655503). Wellesley & Co Limited is not covered by the Financial Services Compensation Scheme. Wellesley Finance Plc is not authorised or regulated by the Financial Conduct Authority. Wellesley Finance Plc and Wellesley Secured Finance Plc are not covered by the Financial Services Compensation Scheme. Wellesley & Co Limited and Wellesley Finance Plc are registered in England and Wales and their registered office is at St Albans House, 57/59 Haymarket, London SW1Y 4QX. The trading address for both Wellesley & Co Limited and Wellesley Finance Plc is St Albans House, 57/59 Haymarket, London SW1Y 4QX, UK.
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