Peterborough United launch Bond to raise capital. Interesting interest rate....

golfaddick

Wasn't sure where to put this & wanted a wider base than the "Savings & Investments" thread.

Peterborough have just launched a new capital raising Bond. The video suggest they are looking at building a new ground that will include a Sports Bar that is open all year round. They have already installed/built a "Dome" as part of their Training Ground to help them machine Cat 2 status. 

What got me (as a Financial Adviser) interested is the terms of the Bond -

• 5 years 
• 9% annual return
• 15% bonus on promotion to The Championship.
• Can be put in to an ISA for total tax free returns. 

I just wonder where the money is coming from to pay those returns. Os it akin to a Ponzi scheme  because after 5 years you are looking at giving fans back almost 150% (not including any promotion bonus). Will the money raised ever be spent on the club or just spent trying to get a 9% annual return.

Mad idea  ???

wwaddick

I’m out. Surely not far off junk bond status.

Blucher

This is certainly worthy of a mention on ‘The Price of Football’. It would certainly go in Kieran Maguire’s ‘very high risk’ basket.

letthegoodtimesroll

golfaddick said:

Wasn't sure where to put this & wanted a wider base than the "Savings & Investments" thread.

Peterborough have just launched a new capital raising Bond. The video suggest they are looking at building a new ground that will include a Sports Bar that is open all year round. They have already installed/built a "Dome" as part of their Training Ground to help them machine Cat 2 status. 

What got me (as a Financial Adviser) interested is the terms of the Bond -

• 5 years 
• 9% annual return
• 15% bonus on promotion to The Championship.
• Can be put in to an ISA for total tax free returns. 

I just wonder where the money is coming from to pay those returns. Os it akin to a Ponzi scheme  because after 5 years you are looking at giving fans back almost 150% (not including any promotion bonus). Will the money raised ever be spent on the club or just spent trying to get a 9% annual return.

Mad idea  ???

There probably is a bet on inflation taking care of a big chunk of their obligation behind that 

killerandflash

Based on past performance on the pitch, Posh have a reasonable chance of promotion to the Championship by 2026/27 which would be quite a financial return

https://www.theposh.com/news/announcing-peterborough-united-bond

golfaddick

killerandflash said:

Based on past performance on the pitch, Posh have a reasonable chance of promotion to the Championship by 2026/27 which would be quite a financial return

https://www.theposh.com/news/announcing-peterborough-united-bond

And I thought we were always told that past performance was no guide to future returns.

We have had recent history of getting promoted back to The Championship after 3 years. Not so sure for the coming season or two though. 

_MrDick

Anyone who thinks they’ll get those sorts of return on investment need to wake up and have a cup of coffee 

Lincsaddick

Peterborough is, or perhaps pre pandemic was, one of the fastest growing towns in Europe. A new stadium is both needed as the current one is old and decrepit and also to attract new fans. Let's hope the new one is as good as Stadium MK Dons .. I will NOT be investing

Covered End

Is it FSCS protected?

Covered End

I read this as no it's not protected, even though they make it as complicated as possible to understand.
I've read it 3 times, it's getting late, but I'm still not clear.
I wouldn't put my money into anything I don't understand and don't understand the risk involved.

Risk Warning

Investment in an unquoted security of this nature, being an illiquid investment, is speculative involving a significant degree of risk. The Financial Services Compensation Scheme (“FSCS”) provides up to £85,000 of investment protection where you have a claim against an investment firm for issues such misrepresentation, where the firm has since failed or otherwise can’t pay your claim. The service provided to you by Tifosy is the arrangement of investments through its website, which typically falls within the FSCS’s remit. FSCS does not, however, protect you where your investments perform poorly, where the issuer fails to pay interest or dividends or where the issuer ultimately becomes insolvent and you lose your money invested. This is the investment risk you take. The FSCS further provides deposit protection in the event of the failure of a UK authorised bank. This covers funds held by Tifosy at such a bank and funds held on your behalf in a client money account (including funds awaiting investment together with interest and dividends paid and capital returned). Before investing please read the Offer Document in full including the “Important Notices” and “Risk Factors”. By investing you agree to the terms and conditions in the Offer Document as well as the Tifosy Investor Terms.

https://www.tifosy.com/raises/peterborough-united-bond

Rob7Lee

Barge pole springs to mind.

SELR_addicks

"FSCS does not, however, protect you where your investments perform poorly, where the issuer fails to pay interest or dividends or where the issuer ultimately becomes insolvent and you lose your money invested. "

Yeah this isn't going to work out and they'll either go 'bust' or refuse to pay dividend. 

SomervilleAddick

I’d like to see the prospectus, because it’s all a bit vague. One thing that is obvious, this is only the first round of fundraising. The money raised is only for the planning - work through the submitting of planning permission. Assuming they get that, then they’ll need to find the money for development. I’m suspicious of the “5 year initial fixed term”. That suggests it’s going to be extendable, but is doesn’t say who has the option on that. 

golfaddick

Covered End said:

I read this as no it's not protected, even though they make it as complicated as possible to understand.
I've read it 3 times, it's getting late, but I'm still not clear.
I wouldn't put my money into anything I don't understand and don't understand the risk involved.

Risk Warning

Investment in an unquoted security of this nature, being an illiquid investment, is speculative involving a significant degree of risk. The Financial Services Compensation Scheme (“FSCS”) provides up to £85,000 of investment protection where you have a claim against an investment firm for issues such misrepresentation, where the firm has since failed or otherwise can’t pay your claim. The service provided to you by Tifosy is the arrangement of investments through its website, which typically falls within the FSCS’s remit. FSCS does not, however, protect you where your investments perform poorly, where the issuer fails to pay interest or dividends or where the issuer ultimately becomes insolvent and you lose your money invested. This is the investment risk you take. The FSCS further provides deposit protection in the event of the failure of a UK authorised bank. This covers funds held by Tifosy at such a bank and funds held on your behalf in a client money account (including funds awaiting investment together with interest and dividends paid and capital returned). Before investing please read the Offer Document in full including the “Important Notices” and “Risk Factors”. By investing you agree to the terms and conditions in the Offer Document as well as the Tifosy Investor Terms.

https://www.tifosy.com/raises/peterborough-united-bond

The FSCS protection covers you if the issuer (Tifosy) or the bank holding the money goes bust. There is no protection from the investment failing. 

I generally say the clients that the FSCS protection with regard to UK high street banks is immaterial as no UK Government will let a high street bank fail. They bailed out RBS and propped up Northern Rock long enough for people to either withdraw their money or transfer it to another bank. 

Swisdom

can I invest my magic beans in it?

if so, I’m in

Kips

And we can probably assume this is the brainchild of the man who said Matt Southall would do well at Charlton.

cafcfan

https://www.fca.org.uk/consumers/mini-bonds

This is interesting. In particular, this key point:

• From January 2020, our rules ban promotions of what we call ‘speculative mini-bonds’ to retail consumers, unless the investor is considered to be ‘sophisticated’ or have a high net worth.

I'd consider the information provided by the club and the FCA regulated firm to be financial promotions (as defined) directed at regular individuals.  The club based inducements/benefits indicate as much. It is highly unlikely that the majority of Posh supporters are either sophisticated investors or high net worth individuals. 
As a caring member of the financial community, I think @golfaddick should grass them up to the FCA.

HardyAddick

I remember putting money in to get us back to The Valley. My shares turned out to be worthless. Worth it though.
Only for fans. Would not touch something with a 9% annual return. What security have you got?

Froggy66

HardyAddick said:

I remember putting money in to get us back to The Valley. My shares turned out to be worthless. Worth it though.
Only for fans. Would not touch something with a 9% annual return. What security have you got?

The money to get back to the valley was the VIP scheme and did not involve shares - they came after we were back at the valley. I had both and whilst the latter ultimately proved worthless I think excellent value for money came from having a 10 year season ticket. I recall the original proposal was to get your money back at the end of the 10 year period (for a larger initial investment) but that they couldn't get anyone to guarantee the return.

charlton4ever

9 %  and 15% bonus - sounds great ! 

SomervilleAddick

cafcfan said:

https://www.fca.org.uk/consumers/mini-bonds

This is interesting. In particular, this key point:

• From January 2020, our rules ban promotions of what we call ‘speculative mini-bonds’ to retail consumers, unless the investor is considered to be ‘sophisticated’ or have a high net worth.

I'd consider the information provided by the club and the FCA regulated firm to be financial promotions (as defined) directed at regular individuals.  The club based inducements/benefits indicate as much. It is highly unlikely that the majority of Posh supporters are either sophisticated investors or high net worth individuals. 
As a caring member of the financial community, I think @golfaddick should grass them up to the FCA.

Looking at their site, they are going to make you self certify to meet the FCA requirements as they are FCA regulated. I’m sure they’ve got that covered. 

HardyAddick

Froggy66 said:

HardyAddick said:

I remember putting money in to get us back to The Valley. My shares turned out to be worthless. Worth it though.
Only for fans. Would not touch something with a 9% annual return. What security have you got?

The money to get back to the valley was the VIP scheme and did not involve shares - they came after we were back at the valley. I had both and whilst the latter ultimately proved worthless I think excellent value for money came from having a 10 year season ticket. I recall the original proposal was to get your money back at the end of the 10 year period (for a larger initial investment) but that they couldn't get anyone to guarantee the return.

I did both too. Thanks for jogging my memory. I remember being presented with something on the pitch at half time by Martin Simons - can’t recall what it was.

Big William

Rob7Lee said:

Barge pole springs to mind.

The bloke in the Donkey Jacket said he'd have some

https://youtu.be/r6TsxDGtMpA

cafcfan

SomervilleAddick said:

cafcfan said:

https://www.fca.org.uk/consumers/mini-bonds

This is interesting. In particular, this key point:

• From January 2020, our rules ban promotions of what we call ‘speculative mini-bonds’ to retail consumers, unless the investor is considered to be ‘sophisticated’ or have a high net worth.

I'd consider the information provided by the club and the FCA regulated firm to be financial promotions (as defined) directed at regular individuals.  The club based inducements/benefits indicate as much. It is highly unlikely that the majority of Posh supporters are either sophisticated investors or high net worth individuals. 
As a caring member of the financial community, I think @golfaddick should grass them up to the FCA.

Looking at their site, they are going to make you self certify to meet the FCA requirements as they are FCA regulated. I’m sure they’ve got that covered. 

I wouldn't bet on it. Last year 132 authorised firms were required to amend or withdraw a total of 564 approved financial promotions.  

The dichotomy, of course, is that anyone who is designated as a sophisticated investor (and thereby waiving their rights to any form of protection/compensation), is by agreeing to this status indicating that they are anything but a sophisticated investor!  (It sounds good chatting to your mates down the pub though.) 

Off_it

HardyAddick said:

Froggy66 said:

HardyAddick said:

I remember putting money in to get us back to The Valley. My shares turned out to be worthless. Worth it though.
Only for fans. Would not touch something with a 9% annual return. What security have you got?

The money to get back to the valley was the VIP scheme and did not involve shares - they came after we were back at the valley. I had both and whilst the latter ultimately proved worthless I think excellent value for money came from having a 10 year season ticket. I recall the original proposal was to get your money back at the end of the 10 year period (for a larger initial investment) but that they couldn't get anyone to guarantee the return.

I did both too. Thanks for jogging my memory. I remember being presented with something on the pitch at half time by Martin Simons - can’t recall what it was.

A pint?

golfaddick

Off_it said:

HardyAddick said:

Froggy66 said:

HardyAddick said:

I remember putting money in to get us back to The Valley. My shares turned out to be worthless. Worth it though.
Only for fans. Would not touch something with a 9% annual return. What security have you got?

The money to get back to the valley was the VIP scheme and did not involve shares - they came after we were back at the valley. I had both and whilst the latter ultimately proved worthless I think excellent value for money came from having a 10 year season ticket. I recall the original proposal was to get your money back at the end of the 10 year period (for a larger initial investment) but that they couldn't get anyone to guarantee the return.

I did both too. Thanks for jogging my memory. I remember being presented with something on the pitch at half time by Martin Simons - can’t recall what it was.

A pint?

Yes please if you're buying.