David Lloyyd Adrenaline World 7%-10% bond

colin

This dropped into my inbox. Seems too good to be true............ Any thoughts?

Good afternoon Colin,

It was a pleasure to speak just now. Please find all the information on David Lloyd’s fixed term investment opportunity below.

Be advised the bond yield has been increased to 10% Per annum Year 1 (for investment £20,000 and above). This is not highlighted in the prospectus or ISA document, but is an exclusive offer for any bondholder going forward.


The company (David Lloyd's Developments M-B Ltd) is a UK company offering an issuance of 7.5% Fixed Rate Bonds to further develop its commercial leisure property projects.

David Lloyd's adventure parks have been set up to deliver the UK's first indoor and outdoor multi activity centres called 'Adrenalin World'.

Adrenalin World was formed in late 2017 created by David Lloyd, the founder of David Lloyd Leisure. Initially backed by two major equity investors, UK Adventure Parks and New World Private Equity Partners, Adrenalin World continues to successfully raise equity seed funding for pre-opening costs that include research and development, land search and product development. The last share issue value the company at £8 million. Adrenalin World has now negotiated heads of terms with five plots of land in Bedford, Marlow, Sandbach, Blackpool and Peak Resorts. Further negotiations are being undertaken at Egham, Cobham and Farnham with additional plots being identified all the time.

Created for the aim of raising capital for its development of ten adventure sites around the UK in association with David Lloyd. The Company is offering Qualified Investors two investment options – the Series A Bonds and the Series B Bonds. The Bonds will be issued by the Company in tranches of up to an aggregate principal amount of £20 million per Series A Bonds and Series B Bonds, with Interest being paid quarterly. Further sites are planned for development and capital will be raised for these at a later date.

Investment into the company has been approved by an FCA regulated company in compliance with the Financial Services and Markets Act (FSMA) and is available as a cash investment OR via a fully FCA regulated ISA provider.

Security over the investment is in place. Woodside Corporate Services Ltd are acting as security trustee on behalf of bondholders. The company holds a floating charge over all assets of David Lloyd Developments.

The David Lloyd Developments M-B investment bond has been approved for distribution in compliance with the Financial Services and Markets Act (FSMA) by Alexander David Securities Limited who are authorised and regulated by the Financial Conduct Authority (FCA Number: 469150).

All investments into the David Lloyd Developments M-B investment bond are transacted via Copia Wealth Management Ltd who are authorised and regulated by the Financial Conduct Authority (FCA Number: 605906).

The security trustee, Woodside Corporate Services Ltd are authorised and regulated by the Financial Conduct Authority (FCA Number: 467652).
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Key Features:

• 7.5-10% p.a. Fixed Rate Investment Bond
• 3 Year Investment Term
• Quarterly or Compound Interest Payments
• Capital Secured Against Assets

• FSMA Section 21 Approved

• Cash & ISA Eligible Investment

• Invest from £10,000 or Transfer Existing ISA
_______________________________________________________________________

Investment Documentation:

https://drive.google.com/open?id=12213yMY__EuLbMTgtcN9eZwImNFuxP7Q

_______________________________________________________________________

I have also attached a PDF which highlights how you can invest directly through an ISA.

If you have any questions feel free to contact me.

I look forward to speaking next week.

Kindest regards,

arjungaur

You could consider investing if they were giving you a % ownership of the business, like a stock

The problem with debt financing remains the same, all the downside of the stock ownership, limited upside and much limited liquidity

This kind of financing should also be best left to larger institutions who would obviously need to get involved actively with the restructuring of the debt and the business should the project run into a headwind like, you guessed it right, the virus ; )

is there a reason why they haven't got regular sell side involved, like Oliver Butt la Partner in City and Continental LLP and gone the route of regular ORB, that should help with some more due diligence

I am assuming bank financing wasn't available or was too expensive, some of the US Asset Managers like Blackstone have started doing credit lending to replace the bank financing gap left after the tighter bank regulations

beekey

Yet another unlisted mini bond. I cannot find any documentation on the web site. Your initial comment is spot on Colin - too good to be true.

hind

Bargepole

arjungaur

haha, bargepole

so now i see, these are what they call mini-bonds, everytime i have heard about a mini-bond, its about how something went wrong with the mini-bond : )

https://www.ftadviser.com/investments/2019/12/05/understanding-fca-s-ban-on-speculative-mini-bonds/

Laughton

As you say "too good to be true". I hate it when people trying to sell you something can't even be bothered to get their grammar right.

colin

Arjungaur, Thanks for the link, makes intresting reading. I think I'll be giving Adreneline World a miss !!

arjungaur

You don't have to close the door on them completely, if you have time you can engage with them using the ideas that beekey/laughton came up with and see if they can improve their offering that is worth a second look : )

shaunm

Not a security on the Orb market,
Therefore unable to exit if required
Very high risk industry at the present moment

sussexmade

Ditto all the above comments. What I believe to be a good name being handled by a fairly chancey bunch. It will be illiquid and bond holders stuck in for 3 odd years and no market to sell in to. The coupon upping opportunity from 7.5% to 10.00% speaks volumes.
It may well be serious and for the right intentions but downside looks too great.

arjungaur

The coupon upping opportunity is due to their lack of understanding of 'financial pressure', they think that giving bit more might entice the investors, and unfortunately they just decreased everyone's performance now.

Instead they should reduce the 'emotional pressure' of the investors by offering them tighter financing covenants, stricture due diligence, more exit liquidity, flexibility in capital structure etc.