Covenant test provides evidence of sound security

Covenant test provides evidence of sound security

The latest review of security cover for REAL Bondholders – comparing the value of bonds against the value of property security – shows an average loan-to-value ratio of below 25%. A figure below 50% implies that sufficient returns would be generated to redeem Bondholders’ investments even if property values were to slump by half.

REAL director Alan Bate comments, “The current low loan-to-value level reflects our increased focus on well-secured first-charge lending. Whilst some individual loan arrangements including second-charge arrangements are closer to the scheme’s 75% LTV limit, the overall picture reflects strong demand from borrowers enabling us to achieve these attractive terms”.

Since the March 2018 launch of monthly interest bonds, regular distributions have continued to bondholders with all payments fully up-to-date.

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