Wellesley mini-bond hits £25 million ahead of schedule – launches series 2…

By Rupert Taylor on 18th January 2016

P2P/Marketplace Lending

Wellesley Finance Plc has closed Series 1 of its corporate mini-bond – the Wellesley Mini-Bond – which is one of the largest ever on the UK market, having raised £25m since its launch in July 2014.  The Series 1 Wellesley Mini-Bond was not expected to close until Q1 of 2016, but has proven exceptionally popular with investors. As a result, Wellesley has now opened Series 2, and aims to raise up to a further £50m.  The terms remain identical with the bond offering interest rates of 7%, 7.5% and 8% (gross) per annum, paid twice a year, for a fixed term of 5, 6 and 7 years respectively.  The minimum investment is set at just £100 and thereafter rises in multiples of £10.

Wellesley mini-bond hits £25 million ahead of schedule – launches series 2…

Key features of the bond:

Term

5, 6 or 7 Years

Security

Unsecured

Interest rate

7, 7.5 or 8%

Interest payments

Bi-annually

Type

Bullet (principal repaid at end of term)

Minimum investment

£100

Maximum issue size

£50,000,000

It is important to note that this product should not be confused with another innovative product that Wellesley have in their stable.  The company also boast an ISA eligible listed bond.  At the launch back in February 2015 this product was one of the few ISA eligible methods of investing in the sector and remains almost unique ahead of the introduction of the Innovative Finance ISA in April 2016. 

Wellesley delivered solid origination growth in 2015.  The platform originated £152m of new lending over the course of the year having delivered just under £140m in 2014.  Interestingly there has been some evidence of a moderation in their growth trajectory.  According to AltFi Data forecasts, based on an analysis of recent growth momentum, the platform is scheduled to grow year on year origination volume by just 2% in 2016.  However the platform does still boast what it calls a ‘100% track record’ underlining that ‘no investor has ever lost any of their funds’.  It could be that a new injection of capital at the company level is just what Wellesley needs to re-invigorate their growth rate. 

Whilst mini-bond launches have enjoyed considerable success in the past year or so there are signs that appetite may be slowing.  Crowdcube recently launched the Pocket Land Bond as a follow up to their hugely successful Pocket Living bond.  Whilst the first issue reached the maximum target issue size of £1.5m the current attempt to raise £1.25-£2.5m is struggling at £350k with just three days to go.  It will be extremely interesting to see if Wellesley can repeat the huge success of series 1 with this larger follow on issue.  

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Companies in this Article:

Brismo
Crowdcube

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