Future Capital to market convertible bond to retail investors
Future Capital Partners, a GBP6bn alternative investment boutique, is to market a nine per cent yielding bond to UK and international retail and high net worth investors.
The Aramid Bond is a convertible redeemable bond which has been issued by the Aramid Entertainment Fund.
The bond offers investors a nine per cent net return on their invested capital which will be paid quarterly in arrears.
The bond issue will be limited to 15 per cent of the fund’s net asset value, which equates to a current offering to investors of GBP15m. The minimum investment is GBP47,000 or EUR50,000, and bondholders will rank above other shareholders of the fund in all respects.
The Aramid Entertainment Fund has returned over 40 per cent since its launch in September 2006, with no negative months. In the last 12 months the fund has returned over eight per cent.
The bond is also expected to be listed on the Cayman Islands Stock Exchange thus opening the investment opportunity to a wider arena of investors in a tax efficient manner.
Tim Levy (pictured), chief executive of Future Capital Partners and a director of the Aramid Entertainment Fund, says: “Investors are increasingly demanding products that offer a cash-plus return in a low risk environment. We believe the Aramid Entertainment Bond does both and is an exciting and risk-averse offering. The fund commits to retaining a cash balance equal to two coupon payments, so the chances of bondholders not earning their expected return are slim.
“By limiting the bond issue to 15 per cent of the net asset value of the fund, we are further enhancing the risk profile of the investment. In fact, the fund’s loan book is secured against hundreds of credit positions with a wide variety of financial institutions, all of which would need to fail for bondholders’ capital to be at risk.”
The Aramid Entertainment Fund focuses on the global media and entertainment industry and provides low to medium term debt finance to producers and distributors of film, television and other media and entertainment - secured against a variety of assets. Typical transactions include discounting film tax credits, pre-production bridge financing, lending against pre-sales distribution contracts and providing secured loans on unsold distribution rights.
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