DBS

58 DOWNING ASSET-BACKED CROWD BONDS ABOUT DOWNING Downing is a long-established, FCA- authorised investment manager, that brings over 20 years’ investment experience to debt based crowdfunding. We launched the Downing Crowd platform in March 2016, and since then have raised over £25 million to support the growth of smaller UK companies. Our role is to arrange the deal between the lenders and the borrowers, which means we source projects, carry out due diligence, write a full Offer Document, and arrange interest and capital payments. In order to manage risk, our Crowd Bonds are secured against existing assets. This means that if a borrower defaults on the Bond, Downing, as security trustee, has the right to take control, sell the assets and use the net proceeds to repay some or all of the investors capital and interest. All bonds come with independent analysis from in:review. Our monitoring fee is contingent on investors receiving their capital back and interest being repaid in full. UK investors in Crowd Bonds can also now earn tax-free interest with our Innovative Finance ISA. DEBT BASED SECURITIES OFFER The Royal Foresters Pub bond is an opportunity to lend to a company that owns a closed freehold pub and hotel site, with the Bond secured against the property. The company has committed to renovate the site and convert it into a pub restaurant with letting rooms (subject to obtaining the necessary planning permissions). Royal Foresters is a large, historic property located between Bracknell and Ascot. In its current condition it has been valued at £3.6 million by Davis Coffer Lyons (DCL), an industry leading specialist adviser to the leisure property sector. This gives the Bond an estimated loan to value of 69%. Oakman Inns and Restaurants Limited intend to extensively renovate the site, and once this work is complete, DCL’s estimated value for Royal Foresters rises to £6.5 million, resulting in a reduced estimated loan to value for bondholders of 38%, though future valuations cannot be guaranteed. The Bond offers investors a chance to earn up to 7.5% p.a. interest over a period of up to 18 months. KENNINGHALL SOLAR Our first asset-backed bond was the Kenninghall Solar One Year Bond, which offered 6.25% to investors in March 2016. This Crowd Bond was secured against an operational solar farm in Norfolk, developed by Armstrong Energy Ltd, who have partnered with Downing on more than £90 million of solar developments in the last five years. £3.2 million was raised in just two weeks through our network of Independent Financial Advisers, along with direct private investors. The offer proved so popular that another three solar bonds have been issued since, raising a further £6.1 million. The average investment was £19,000 and the 168 investor base included companies and SIPP/SSAS trustees. Interest was paid at six months and alongside the capital repayment which was made, on schedule, 12 months after the bond was issued. CASE STUDY RANGE OF CROWD BONDS FROM MARCH 2016 TO MAY 2017 £9.3m SOLAR £6.9m PUBS £3.0m WIND £3.0m CARE £2.0m ANAEROBIC DIGESTION £1.2m HYDRO