BlueZest announces plans for a ‘programme’ of secured retail bonds
Specialist mortgage lender BlueZest has today announced that it has mandated lead manager Bedford Row Capital to arrange a series of roadshows with fixed income investors to discuss a possible issue of sterling denominated, secured retail bonds.
Subject to a positive outcome and favourable market conditions, an offer of bonds may follow as part of an ongoing programme for the issue of bonds that the issuer intends to establish.
If successful the bonds will be issued by BlueZest Secured Retail Bond PLC, a wholly owned subsidiary of BlueZest Mortgages and Loans Ltd (Blue Zest); the proceeds of each issue will pass to BlueZest via a loan agreement for the conduct of its mortgage lending business.
BlueZest is a specialist mortgage lender which utilises its proprietary technology decision-making software solution called the ‘Zest Engine’ in offering a range of carefully tailored buy to let and mortgage products.
The company’s focus is on lending to landlords, developers and small business owners, who have UK residential property to provide as security.
BlueZest offers its clients a supportive business relationship as a preferred financing partner, built around open and honest fee structures, fast decisions and customer-focused operations; the company is committed to delivering what it calls ‘The BlueZest Advantage’
Bonds issued under the programme will benefit from a number of security interests to be granted by BlueZest and/or the issuer and held on behalf of bondholders and other secured creditors by Capita Trust Company Limited as trustee.
The security package includes (without limitation) security granted over and in respect of:
- Each UK residential property-backed mortgage loan that BlueZest originates using the proceeds of Bonds;
- A mortgage indemnity guarantee, arranged by BlueZest with AmTrust Europe Limited, a global insurer and part of the ‘A’-rated AmTrust Financial Group.
- The AmTrust Europe policy, taken out against each mortgage loan that BlueZest originates using the proceeds of bonds, provides insurance against borrower default and subsequent losses suffered by BlueZest.
Certain bank accounts which are expected to be opened with a global financial institution into which the net proceeds of the issue of bonds under the programme will be held (pending utilisation for mortgage loan completions) and collections will be received from customers and held until they are used to pay amounts due on the bonds.
The issuer intends to regularly issue bonds in denominations which make them accessible to retail investors and it plans to apply for any bonds issued under the programme to be listed on the Official List of the Financial Conduct Authority and to facilitate trading on the regulated market of the London Stock Exchange plc and through the Order Book for Fixed Income Securities (OFIS), one of the electronic trading services operated by the LSE for retail bonds.
Demand for retail bonds from investors has been strong, but there has been a dearth of offers of late, particularly on the LSE’s Order Book for Retail Bonds (ORB); if BlueZest announces its programme it is likely to be well supported by those seeking income and the concept of regular issuance may appeal to those that have been thwarted in the past when the offer period of an oversubscribed bond has been cut short.
For more information about retail bonds visit Retail Bond Expert
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