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First time such an offer has been used in Ireland to finance a property project
Foxglove Finance, a new property finance company founded by accountant Declan de Lacy and chartered surveyor Peter Stapleton, is raising a €1.6 million ‘mini bond’ to complete 29 houses in Courtown, Co Wexford.
This will be the first time such an offer has been used in Ireland to finance a property project. Foxglove’s directors are already working on three other similar projects.
The initial so-called ‘mini bond’ will see Foxglove issue a loan note with a 12-month term carrying a 10 per cent rate of interest with investors asked to subscribe at least €10,000.
The property the loan note will be used to develop is part of an existing development of 200 houses with the developer of the project predicting a surplus before loan interest of €600,000 from the project.
Foxglove has obtained independent assessments of sales prices and completion costs consistent with this forecast.
De Lacy, a director with accountancy firm PFK O’Connor, Leddy & Holmes, told The Sunday Business Post: “We have clients who are developers and are asking us to raise money in a different way to the traditional banking route.
“At the same time, we have other clients who are comfortable investing in property and are asking ‘Can you put something in front of us?’ There is a logic in what we are doing by putting the two together.”
De Lacy said Capita and Matheson were working with Foxglove on the transaction.
De Lacy’s business partner in Foxglove is Peter Stapleton, a director of Lisney, and a chartered surveyor with 35 years of experience, including during the bust, when he acted as a receiver for both the banks and the National Asset Management Agency.
“We have a pipeline of other projects that we plan to finance in this way. We have three definite projects lined up after this one,” De Lacy said.