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Acorn Property Group
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A Bond is simply a debt obligation; a type of loan. Bonds are created using a legally binding agreement which evidences the existence of a debt between a borrower (the Issuer) and one or more lenders (Bondholder(s)). The agreement (usually called the Bond ‘instrument’) sets out the terms of the loan including the loan amount, interest rate and repayment dates.

A “mini-bond” is the name given to a bond which is issued by an unquoted company, is not tradeable on any regulated market and, frequently, is not even legally transferrable and so must be held by the Bondholder for the entire specified term. Consequently, mini-bonds have a significantly higher risk profile than other types of listed bond.

“Mini-bonds” cannot be transferred to someone else, either legally because their terms prohibit it or practically because there is no ready market for their sale and purchase. In contrast, retail corporate bonds and government gilt-edged securities are freely tradeable instruments with a liquid market.

Mini-bonds are much higher risk investments. Unquoted Bond issuers, and the Bonds themselves, are generally not regulated by the FCA or any equivalent regulator and investments in them are not protected by the Financial Services Compensation Scheme. Capital invested in “mini-bonds” is at risk of partial or total loss.

A debenture is a form of security, usually granted in favour of a security trustee to hold on behalf of bondholders, which generally attaches to all the current and future assets of the issuing company. In the event of a default (such as non-payment of interest or capital), the security trustee can enforce the security and take control of the issuer’s assets in order to sell them for the benefit of the bondholders.

The investment is secured by way of a debenture (see above) over the Company, meaning bondholders rank in priority to unsecured creditors of the Company. The terms of the debenture prohibit the Company from granting any other security which ranks in priority to that granted to the security trustee on behalf of bondholders. The presence of this security does not mean, however, that capital and returns are guaranteed. In addition, in the event of a default, as defined by the Bond Instrument, RST Group Holdings Limited have provided a corporate guarantee for the purpose of providing credit support for the Company’s obligations under the Bond Instrument.

The capital invested in the Bond is guaranteed by the Acorn Property Group holding company, RST Group Holdings Limited, whose accounts are available at Companies House and which has a value of approximately £60 million pounds, a turnover of £61.3 million pounds and made a gross profit in 2018 of £9.5 million pounds.”

Neither the Company nor the Bonds are regulated. Accordingly, this is a higher risk investment than alternative regulated products.

Any individual who is over the age of 18, or a trust, company, the retail sector or charity that is not prevented by the laws of its governing jurisdiction from applying for or holding the bonds. Investors must also fall within one of the following categories:

(i) certified high net worth investors (as per COBS 4.7.9R);
(ii) certified sophisticated investors (as per COBS 4.7.9R); or
(iii) self-certified sophisticated investors (as per COBS 4.7.9R);

and for whom an investment in the Company can be assessed as being appropriate in light of their knowledge, experience and expertise.

We recommend all investors speak to an advisor who is authorised under the Financial Services and Markets Act 2000 and specialises in investments of this kind.

All of your original investment is expected to be returned in full at maturity of the Bonds, being either 3 or 5 years depending on the particular series of Bond the Investor chooses.

You may be able to hold your Bonds in a SIPP and SSAS wrapper provided your pension provider is willing to accept non-standard assets such as unlisted securities. Investors must check with their pension provider first and should not assume the Bonds will be SIPP or SSAS-eligible.

Yes, corporate investments or joint applications can be accepted.

Interest is calculated from date funds are cleared and made available to the Company (and all KYC and AML documentation has been received).

No, the Bonds are non-transferable. Potential investors should consider carefully whether an investment in the Bonds is right for them in light of their personal financial circumstances as they will not be able to sell the Bonds and receive their capital back until the end of the relevant term (3 or 5 years depending on the series).

Subject to the Issuer’s discretion, the Directors will endeavour to redeem, within a reasonable period, Bonds held by the executors of deceased Bondholders, where so requested, to assist with probate liquidity.

This will depend on your personal circumstances. In most cases, you will receive interest payments after the deduction of 20% “withholding tax” which we will pay direct to HMRC on your behalf, as is required under UK law. In this case, we will supply you with an annual statement setting out the tax paid. Where you are a higher or additional taxpayer, you may be required to pay additional tax. In certain circumstances, withholding tax usually does not apply, for instance where the subscriber is a UK company or where the Bonds are held in a pension. For all information about tax we recommend all Investors speak to an independent tax advisor who is authorised and specialises in investments of this kind.

We recommend all Investors speak to an advisor who is authorised under the Financial Services and Markets Act 2000 and specialises in investments of this kind.

Investors can apply through an authorised financial intermediary or directly by using the application form provided. We strongly recommend investors consult an appropriately authorised financial adviser before making an application to subscribe for Bonds.

You may cancel your application, in writing, at any time within 5 days from the date on which your application is received.

If you have any further questions, please send an email to [email protected] or call 0203 858 9881.

Acorn’s ethos is ‘Different by Design’ and all Acorn developments are residential-led and bespoke to reflect the local community’s needs. The majority of our schemes involve the regeneration of brownfield sites, replacing and converting redundant buildings to create homes and, where appropriate, office and retail spaces. We develop a wide variety of sites; urban, rural, brownfield, greenfield and conversions, including many listed buildings.