Social impact bond offering a fixed return, with Community Investment Tax Relief availbale
The Midlands Together Community Interest Company (CIC) 2013 Bond Issue is an issue of Series A Bonds and Series B Bonds, both of which are securities issued by Midlands Together CIC with the aim of providing investors with a fixed level of interest over five years, paid bi-annually in arrears.
The Bond Issue is also designed to have a social impact with the subscriptions raised by the combined Bond Issues being used for the purchase and refurbishment of sub-standard property - employing, training and mentoring ex-offenders in their repair and restoration.
The Series A Bond attracts a fixed interest rate of 4% per year while the Series B Bond attracts a fixed interest rate of 6% per year. Both Bonds are secured by way of all asset debentures over the company’s property portfolio and the Series A Bonds rank ahead of Series B Bonds for security purposes. Series B Bonds also attract Community Investment Tax Relief (CITR) under which investors can receive relief against their income or corporation tax liability.
Key risk Factors
Liquidity – your investment is an unquoted security with a fixed repayment date. Although technically transferable, these securities will not be listed or dealt in on any recognised investment exchange and so are designed to held for the full term. Such investments are therefore speculative and can involve a high degree of risk
Security – the Bonds are secured debts of Midlands CIC with both Bonds ranking for repayment in the event of default behind any commercial loans that may be taken on by the company
Capital repayment – Midlands Together CIC’s ability to repay the Bonds in full in 2018 is dependent on the success of its business model and means of potential refinancing, neither of which is guaranteed
Company track record – Midlands Together CIC is a newly formed company and has yet to commence trading – it therefore has no track record.
Tax – for investors in the Series B Bonds, the availability of CITR is dependent on current tax legislation and HMRC practice as well as Midlands Together CIC’s ability to manage its operations in compliance with the CITR regulations
Other risk factors – this is not an exhaustive list of relevant risk factors and you should read the factsheet and Investment Memorandum carefully before deciding to invest
As an unlisted bond this Bond is targetted at investors who do not require access to their investment for the full five year term and who are preapred to lose some or all of their investment in return for a fixed rate of interest. Due to the nature of this investment it is deemed potentially appropriate for experienced investors or highly motivated social investors only.
The Bond issues are available to individual investors as well as businesses, charities and trusts.
Fixed annual income: 4% Series A Bond, 6% Series B Bond, paid bi-annually in arrears
Capital at risk investment*
Illiquid investment – non-tradeable and therefore designed to be held for the full term
Series B Bond Issue eligible for Community Investment Tax Relief (CITR)**
Security – all assets debenture on property portfolio with Series A ranking ahead of Series B
Use and social impact – purchase and refurbishment of sub-standard property – employing, training and mentoring ex-offenders in their repair and restoration
- Investment term - 5 years (fixed)
- Minimum single investment - £20,000, increasing in £5,000 increments thereafter
- Target amount to be raised - £3 million
- Also available to businesses, charities and trusts
Investment deadline for application to be received by Fair Investment Company: 27 September 2013
* The return of your initial investment is dependent on the success of Midlands Together CIC’s business model and means of potential refinancing, neither of which is guaranteed. Investment in an unquoted security of this nature is speculative and therefore can involve a high degree of risk
** The availability of CITR is dependent on current tax legislation and HMRC practice as well as Midlands Together CIC’s ability to manage its operations in compliance with the CITR regulations