Triodos Bank UK Ltd
As you may be aware, 2020 sees Triodos Bank UK celebrate 25 years of delivering the bank’s mission to use money with conscious thought about its environmental, cultural and social impacts, meeting present day needs without compromising those of future generations.
We believe that sustainable banking has never been more relevant, and that we have an important role to play in funding values-led organisations as the global economy starts to rebuild and recover from the current global health crisis.
We only lend the funds entrusted to us to organisations making positive social, environmental or cultural change and are 100% transparent about who we lend to (www.knowwhereyourmoneygoes.co.uk). We have a 25-year track record in the UK with a growing and profitable business.
The bond offer
Prompted by the UK’s withdrawal from the European Union, Triodos Bank UK Ltd became a wholly owned subsidiary of Triodos Bank N.V. in 2019. To date, Triodos Bank UK’s regulatory capital requirements have been met by Triodos Bank N.V. and this support will continue into the future. However, as a separately regulated banking business, Triodos Bank UK also wants to be able to supplement group capital with its own local resources to help finance future growth plans.
Triodos Bank UK bonds are eligible to be held in a Triodos Innovative Finance ISA (IFISA). The IFISA is a type of ISA that allows you to hold crowdfunded debt securities such as this bond. As with all ISAs, there are eligibility criteria and you receive interest tax-free. ISA eligibility does not guarantee returns or protect consumers from losing their money.
To invest in Triodos Bank UK bonds through a Triodos IFISA, select the ‘Invest through IFISA’ option. This selection will add to your current year IFISA or will open a new IFISA if you haven’t previously opened one.
Transferring an existing ISA
If you want to invest by transferring an existing ISA to a Triodos IFISA you must first request the transfer. You can do this under ‘Account’ once you’ve become a registered user of the platform. Your ISA transfer must be completed first, before you make an application for bonds.
Triodos Bank UK Ltd (TBUK)
£5 million, of which £2 million is open to retail investors
10 years, with a one-time option to repay in full after 5 years
4% gross per year payable in two equal instalments on 30 April and 31 October each year (paid net of UK basic rate tax unless held in an IFISA). Payment of interest and repayment of capital are not guaranteed.
Interest rate reset
5 years after the date of the bond instrument (the Reset Date), the interest rate is reset automatically and fixed at 3.9% above the prevailing base rate at that time.
Unsecured and subordinated
Bonds rank ahead of equity in the event of insolvency but behind all other liabilities such as ordinary unsecured creditors and any claims by those protected by the Financial Services Compensation Scheme. The regulators also have the ability to take certain pre-emptive actions ahead of an insolvency such as converting the bonds into equity.
No parent guarantee
Bonds are an investment in TBUK which is a wholly owned subsidiary of Triodos Bank N.V. There is no parent guarantee and Triodos Bank N.V. is not contractually obliged to repay the bonds on behalf of its subsidiary.
Bonds are transferable but are not listed on any investment exchange which means that bondholders will have to find a willing buyer and agree a purchase price with them, which in practice may not be easy. Investors should be prepared to hold the bonds for their full 10-year term.
£4 million. If less than £4 million is raised, monies will be returned to investors with no accrued interest.
Closes at noon on 30 November, unless fully subscribed earlier or offer is extended. Bonds are allotted 15 days after close and investors start to accrue interest from that date.
Capital at risk warning
Past performance is not an indication of future performance. Capital is at risk and returns are not guaranteed. Investors should read the offer document in full, including the risks section, before deciding whether to invest.