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Based on a successful business model, the corporate bonds are secured on a bricks-and-mortar business, fully transparent, and high performing with an average annual return of 6.75%.
The corporate bonds are secured by the assets of the company pursuant to a debenture granted by the company to the security trustee for the benefit of the bondholders. In addition, the operator will provide its guarantee of the company’s obligations to the bondholders and will secure that guarantee by granting security over all of its assets including a recorded lien over each property purchased by the operator. The loan to value ratio for each property purchased with proceeds of the loan facility cannot exceed 100% at drawdown, however it may subsequently vary, subject to movements in property values.
Investors can purchase a corporate bond for a limited period on the basis of an Information Memorandum (IM) issued on request. A minimum investment of £10,000 is required to participate with a maximum of £3.9 million. Interest of 6.75% per annum will be paid semi-annually in arrears to bondholders who do not make a roll-up election. Bondholders who make a roll-up election and hold corporate bonds for the full fiterm will earn an annual equivalent return [AER] of up to 9.07%. Bndholders who make a roll-up election and hold the corporate bonds for a three-year term will earn an AER of 6.86%. Bondholders who do not make a roll-up election and who hold the corporate bonds for either the three or five-year term will receive an AER of 6.86%.
5 Year Term or Redeem Early
Investors are offered the option to exit the investment early. There's a 5 year term in pace, but investors have the option to take a fixed early redemption, which is on the 1st June 2019. For those who do take the full term, there's a bonus pay of 3% per annum.
The Olmsted team are responsible for sourcing, purchasing, renovating, retrofitting, letting, and managing the properties. The team are affiliated with The Palmetto Group, an investment firm, and Conrex, a company that has followed a purchase to rent strategy since 2009 in the South East United States and currently manages over $100 million in a single family real estate assets located in eight cities.