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Peer2Peer Finance News | October 23, 2018

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BlueZest to raise up to £10m from first tranche of retail bond

BlueZest to raise up to £10m from first tranche of retail bond
Suzie Neuwirth

BLUEZEST, a newly-established UK mortgage lender, expects to raise up to £10m from the first series of its retail bond offering that closes next week.

The first series of the £1.5bn bond programme opened on Monday 27 November and closes on Tuesday 12 December, with the proceeds to be used to fund BlueZest’s pipeline of mortgages.

The five-year bond is listed on the London Stock Exchange, offering investors 5.25 per cent interest paid on a quarterly basis, with a minimum investment of £1,000.

A spokesperson said authorised offerors – which include AJ Bell Securities, Redmayne-Bentley and Syndicate Room – had been bringing in orders, with the first series set to raise between £5m and £10m.

The Nottingham-headquartered firm originates buy-to-let, small- and medium-sized enterprise and development loans, with each facility secured against UK residential property.

Read more: Bonds grow in popularity due to IFISA wrapper

The company sees its in-house technology as a key differentiator, with two former Experian credit profiling technologists now holding the roles of chief executive and chief technology officer.

It also offers investors extra protection in the form of insurance provided by American firm AmTrust, to protect investors from the risk of falling property prices in the event that borrowers default on their loans and the security needs to be enforced.

The second series of the bond issuance is scheduled for next February.

BlueZest is not the first property lender to enter the retail bond market. Former Peer-to-Peer Finance Association member LendInvest became the first fintech firm to list a retail bond back in August, closing its offer a day early after high demand saw it raise £50m.

Read more: LendInvest to return to retail market with new bond issue