Bond Holder funds are secured by a charge over the assets of LC&F and all borrowing companies. London Capital and Finance plc have appointed an independent Security Trustee who holds the security on behalf of the investor.
London Capital and Finance Plc is a successful corporate lending company. It lends money to companies who have undergone a strict due diligence process and can provide adequate security for the loan.
What is adequate security? When funds are lent out, a charge over either property or other assets of the Borrowing Company is taken at no more than 75% loan to value. So, for example; with a loan of £750,000, the value of the charged assets of the Borrowing Company would need to be at least £1 million.
As an investor you would have a charge over the assets by way of a legal vehicle known as a debenture. This means that all investors will have a charge over the secured assets which include the cash reserves in London Capital & Finance Plc and the security taken from borrowing companies.
Capital repayment will be made from:
The following factors are key risks associated with this investment, they should not be considered definitive and you must refer to the Information Memorandum for a more complete list.
There is, and will be, no established market for
the Bonds as the Bonds are not transferable and
you should not invest if you may need to realise
your investment prematurely.
Investments in unquoted securities (i.e. investments
not listed or traded on any stock market or
exchange) such as the Bonds are illiquid (i.e. they
cannot be disposed of prior to the Maturity Date so
as to realise cash). The Bonds are non-transferable,
so your money is effectively locked in until the
Maturity Date of each specific Bond.
The statements in this brochure and the associated
Information Memorandum are intended to be a
brief description of some of the consequences of
investing in bonds. Potential Bond Holders should
seek their own specialist advice if they are unsure
of their own taxation position in relation to
investing in bonds.
LC&F is required by HMRC to retain a 20% withholding tax from any interest payable from the bond. Bond Holders may be liable, depending on their own circumstances, to further taxation on the interest payable by the bonds. Any additional taxation liability will be required to be met from Bond Holders own resources.
LC&F makes loans to Borrowing Companies and is reliant on these Borrowing Companies to repay the loans LC&F grants in order for LC&F to be able to make payments of principal and interest to Bond Holders. If a significant volume of loans fall into default, LC&F may not have sufficient funds to be able to pay principal and interest to Bond Holders within the timescales of the Bond.
The Bonds are secured by a debenture over the assets of London Capital & Finance Plc. There can be no assurance that, in the event that this security is realised, the amounts realised will be sufficient to satisfy the obligations to repay principal and accrued interest under the Bonds.