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․ PROSPECT CAPITAL ⭢ Loan Notes

2018


․ PROSPECT CAPITAL ⭢ Loan Notes

2018

․ PROSPECT CAPITAL ⭢ Loan Notes


A reputation for integrity â­˘ 01


⭢ Loan Notes

About us ․ Prospect Capital has built an excellent reputation for ethical, responsible lending in the specialist finance and bridging market as a direct result of our ability to generate strong deal origination coupled with high quality underwriting. We value our reputation for successful propertybacked lending.

Our ethos ⭡

․ Long-term

relationships

․ Strong

expertise

․ The highest integrity

Through our straightforward and transparent approach, we seek to forge long-term relationships with borrowers, investors and business partners alike that will benefit all stakeholders.

Our senior team brings together over 70 years of experience through a unique combination of professional lending and legal expertise.

We believe in ethical lending of the highest integrity and therefore always seeking to ensure that our clients can succeed in their ventures through our involvement.

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• PROSPECT CAPITAL

Loan Notes ․ Prospect Capital provides attractive and secured returns for a loan note holder, supported by strong and considered security structures.

A guaranteed interest rate of 6.5% per annum paid quarterly with your capital fully secured. The loan note is ideal for private family offices, wealthy individuals, sophisticated investors and institutions looking for an attractive, guaranteed and secure return on cash.

․ Key Features ⭣ • 6.5% per annum interest (paid quarterly) • Secure income generation • Capital secured by tangible property assets • Minimum amount per loan note is £500,000 • Term is 3 years ⭣

6.5%

Capital secured

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⭢ Loan Notes

How our Loan Note structure works Subscription monies

PCC (Loan Note Issuer)

Issues Loan Note

Holds security on behalf of Loan Note Holder

Loan

Prospect Capital Ltd (Lender)

Customer Loans

Loan Note Holders

Security for Loans

Loan Note Holders Customers

Security over Prospect Capital bank account & customer loans

Loan Note Holders Independent Trustee

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• PROSPECT CAPITAL

Examples of our lending ․ ⭣

01

․ Jersey ⭣

Term:

12 months

Type:

Bridging Loan

LTV:

65%

Security Value:

£2,300,000

Amount Lent:

£1,500,000

․ London

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․ Reading ⭣

Term:

18 months

Type:

Bridging Loan

LTV:

60%

Security Value:

£1,850,000

Amount Lent:

£1,100,000

․ Essex ⭢ 05

Term:

12 months

Type:

Bridging Loan

LTV:

31%

Security Value:

£810,000

Amount Lent:

£250,000

NW3

Term:

6 months

Type:

Bridging Loan

LTV:

43%

Security Value:

£1,170,000

Amount Lent:

£500,000

․ London

05

02

EC1

Term:

12 months

Type:

Bridging Loan

LTV:

40%

Security Value:

£2,500,000

Amount Lent:

£1,000,000

04


⭢ Loan Notes

The security of your capital is our number one priority. ⭢ 06


• PROSPECT CAPITAL

Security and peace of mind ․ The security of your capital is our number one priority. That's why your capital is guaranteed by Prospect Capital, which is supported by tangible security in the form of cash and property to at least 140% of your loan note value. The security of your funds is our first and foremost concern. Over the next few pages we have outlined in more detail how loan note holders' funds are secured. If you have further questions regarding any of these points, please don’t hesitate to contact us. We would be happy to provide further information.

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․ How we secure funds ⭣ • Prospect Capital only provide secured loans that meet a strict set of covenants, which are outlined in section 04. • An independent regulated security trustee manages the entity that all loan holders subscribe to. • The regulated security trustee holds all individual customer loans written by Prospect Capital, together with security over the funds held in Prospect Capital's bank account, thereby protecting the interests of the loan note holders as outlined in section 03.

․ Why use a protected cell company ('PCC')? ⭣ ⭢

• The PCC is an independent non-trading company managed by an independent regulated trustee.

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• The PCC’s sole purpose is to provide an individual cell for each loan note holder in a secure environment. • Each cell is fully protected by law against the liabilities of any other cell. • You will receive a loan note from your cell which undertakes to return your capital at the end of the loan note term and in the meantime, pay you interest each quarter.

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⭢ Loan Notes

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․ The role of the regulated security trustee ⭣ • The customer loans are subject to a security agreement in favour of an independent security trustee. • Prospect Capital holds in a segregated bank account any funds not lent to its customers. The regulated security trustee has a first priority security interest over this account. • The regulated security trustee also holds security over all individual customer loans written by Prospect Capital. • In the highly unlikely event of Prospect Capital failing, all rights and benefits of the customer loans and any cash held in the segregated bank account are held by the regulated security trustee for the benefit of loan note holders. • Of course, this only applies in the very worst-case scenario. In the ordinary course of our business there are many other safeguards put in place to protect the funds of our loan note holder and these are outlined below.

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․ The covenants Prospect Capital must comply with prior to any loan being advanced to a customer

⭣ • A legal charge over the property. This effectively gives Prospect Capital legal title to the property until the loan has been repaid. • A professional valuation by a RICS (Royal Institute of Chartered Surveyors) valuer whose firm has an appropriate level of professional indemnity cover. • A maximum LTV (loan to value) of 70%. This means we will only advance up to 70% of the market value of a property, thereby providing a buffer between the current value of the property and the amount of money Prospect Capital are owed. As this is a maximum LTV, the average across all loans is less. • An all risks policy with Prospect Capital’s interest noted. This ensures the value of the property is protected against unforeseen events such as a fire.

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• PROSPECT CAPITAL

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․ Other factors that contribute to the security of your funds ⭣ • Prospect Capital’s underwriting criteria aims to minimise the risk of any default. • Prospect Capital only use lawyers who carry substantial professional indemnity cover and specialise in securing this type of lending. • Every time a loan is advanced, the regulated security trustee is provided with a set of security documentation pertaining to that loan. • Every loan that is advanced is subject to a post-completion audit by a specialist employed by Prospect Capital. A monthly report is produced and issued to the board of Prospect Capital and the security trustee with the results of this audit, verifying that all the security documentation is in order. • The regulated security trustee performs their own quarterly audit to verify the results of the Prospect Capital internal audit.

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․ What happens in the event that a customer does default on a loan? ⭢

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• Prospect Capital will exercise its security over the asset, which will then be sold. Prospect Capital will undertake the recovery of the loan principal sum together with any interest and fees due along with any costs of enforcement. •

As the loan amount is no more than 70% of the asset market value, Prospect Capital would expect to recover all outstanding amounts. In the unlikely event the loan principal does not get fully repaid, Prospect Capital will make up the shortfall from its own capital, thereby ensuring loan note holders’ funds are unaffected.


⭢ Loan Notes

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․ What happens if Prospect Capital fails? ⭣ •

All cash from loan note holders is paid into a Prospect Capital segregated bank account until it is paid out to fund client loans. The regulated security trustee has a first priority security interest over this account, therefore - in the unlikely event that Prospect Capital fails - the regulated security trustee takes immediate control of this bank account and all the funds held within it.

• All loans issued by Prospect Capital using loan note holders’ cash become the immediate property of the regulated security trustee who will continue to collect the interest and capital when repaid, returning the same to the loan note holders.

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․ What are the benefits of holding cash in a loan note rather than advancing loans yourself?

⭣ • Rather than your cash financing one loan, it contributes to financing several. This reduces your risk by providing you with a greater spread of loans you are funding. • The previously mentioned point, coupled with the structure, processes and procedures we have in place provide an even greater level of security for your capital. • In the event of a shortfall on recovery of a defaulting loan, Prospect Capital will make up the difference from its own capital. • Regulation requires that all lenders, including individuals, meet strict AML (Anti-Money Laundering) due diligence and compliance procedures and the regulator is increasingly seeking to prevent lending from those who don’t comply, or have the appropriate approval.

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․ Prospect Capital 13 Broad Street St Helier JE2 3RR

info@prospect-capital.co.uk www.prospect-capital.co.uk

+ This material is for informational purposes only. It is not a prospectus nor legal advice or a substitute for legal counsel. It does not constitute an offer, or an invitation to purchase or subscribe to securities in Jersey.

A subscription for loan notes issued by the issuer is only suitable for sophisticated investors who understand the risks involved in subscribing to such loan notes and do not constitute a collective investment fund for the purpose of the Collective Investment Funds (Jersey) Law 1988, as amended, on the basis that they are investment products designed for financially sophisticated investors with specialist knowledge of, and experience of investing in, such investments, who are capable of fully evaluating the risks involved in making such investments and who have an asset base sufficiently substantial as to enable them to sustain any loss that they might suffer as a result of making such investments. These investments are not regarded by the Jersey Financial Services Commission as suitable investments for any other type of investor.

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Any individual intending to invest in any investment described in this document should consult his or her professional adviser and ensure that he or she fully understands all the risks associated with making such an investment and has sufficient financial resources to sustain any loss that may arise from it. Neither the issuer nor the activities of any functionary with regard to the issuer are subject to all the provisions of the Financial Services (Jersey) Law 1998, as amended.

© Copyright 2018 Prospect Capital


Co-Lending Proposition

The Market ․ The traditional routes to lending provided by banks have changed. There remains a high demand for bespoke secured lending which offers a strong return on capital to counter the void created by the banks’ contraction in the market. We recognise that every borrower’s finance requirements are unique. At Prospect Capital we don’t try to make our borrowers’ situation fit our structure, instead we specialise in offering the best and most efficient lending solutions for each unique situation, whilst ensuring that the security of the loan remains our number one priority.

․ Our lending proposals include: ⭣

01

․ Residential ⭣

02

․ Commercial

⭣ ⭢

․ Developments

04

04

Prospect Capital Loan Notes  

Prospect Capital has built an excellent reputation for ethical, responsible lending in the specialist finance and bridging market. Driven by...

Prospect Capital Loan Notes  

Prospect Capital has built an excellent reputation for ethical, responsible lending in the specialist finance and bridging market. Driven by...