Welbeck specialises in Convertible Loan Notes for AIM listed companies or those in the process of being admitted to the market.
Our clients are typically looking to support a major growth event such as entering a new market, launching a new product or making a new acquisition.
The investors we work with are most of the top tier institutional investors in the AIM market.
Expertise Based On ExperienceAs at March 2017
- Members of the Welbeck team have introduced £90M of capital to private and public companies.
- Of the £33M in transactions that have exited to date, the IRR has been 20% with a return of £43M.
- Current transactions represent £57M of invested capital. Returns to date reflect interest payments.
- All the CLNs benefit from senior security and pay an annual coupon of 8 – 10%.
- Investors in the Convertible Loan Notes have included Miton Group, Axa Framlington, Herald Ventures, Octopus Investments, City Financial, Heritage Capital Management and Harwood Capital LLP.
Convertible LoansThe key points for a Convertible Loan Note are:
- Amounts £1M to £20M
- 5-year duration
- Secured through a “covenant lite” structure
- Pays a coupon, typically 8% - 10% per annum, quarterly in arrears
- Have the right to convert into equity at a 20% - 30% premium to the placing price, not a discount, and so reduce the dilution effect of the fund raise to existing investors
- Can be structured to be VCT compliant
- Our CLNs are normally listed on a recognised exchange, for which we prefer The International Stock Exchange (TISE) to ensure they qualify as an acceptable security for institutional investors.
- Throughout the process, we always work closely with your Nominated Advisor and Broker.