Exposure to external events
The trading and assets of the Group could be affected by unforeseen events outside its control, including economic, social and political events and trends. These include changes in economic, political, administrative, taxation or other legal or regulatory regimes, terrorist or other attacks, inflation, deflation or other currency exchange fluctuations.
Past performance of financing is not necessarily a guide to future performance. Past events, experience derived from these, or assumptions derived from any of these, do not predetermine the future.
The Project Company’s business strategy
The Project Company’s business plan is based on assumptions about market performance and predicted future trading of its current and proposed business activities, which are supported by research undertaken and the Operating Company’s team’s experience to date. The Project Company considers these assumptions to be reasonable but is inherently subject to variation and uncertainty. There is no certainty that all or any of the elements of its business plan will be fulfilled, that the outcome of the Project Company’s strategy will be as anticipated or that the Project Company will achieve the required level of profitability or sufficient cash flow to achieve its stated objectives.
Fluctuation in property values
The valuation of the site, upon which the Directors of the Project Company will rely for determining covenanted security, has been prepared by Matthews & Goodman and provides (1) a current valuation of the Site; (2) an estimated value once the development has been completed, but is not occupied; and (3) a final estimated value once the Site is occupied. Thereafter, the value of this security is subject to change. Property and land values can fall as well as rise. A risk exists, therefore, that the Site, if required to be sold, may be less than the value of the outstanding IFISA Corporate Bonds and, in such circumstances, Bondholders may not get back all of the capital they have invested in the IFISA Corporate Bonds as well as all accrued but unpaid interest.
Potential for cost overruns or delays to construction schedules
Costings and timescales for the development of the Site have been estimated by the directors of the Operating Company based on their experience, third party professional advice and discussions with various contractors and consultants. If actual costs or timescales materially exceeded these estimates the ability of the Operating Company to meet its obligations under the IFISA Loan Note Instrument may be impaired.
No FSCS Protection
Whilst The Prime ISA is managed by Northern Provident Investments Limited, an ISA plan manager Authorised and regulated by the Financial Conduct Authority (‘FCA’), the bonds that you will invest in are issued by Prime, which does not carry on regulated activities for which authorisation is required and so it is not authorised by the FCA. Therefore any losses incurred by the failure of the bonds would not be protected by the Financial Services Compensation Scheme (‘FSCS’). If Prime ceases to exist or goes into liquidation you would not be able to put in a complaint through the FSCS.
Diversification means spreading your investments across different asset classes and sectors. All investments through The Prime ISA will be in, you should be aware that all monies invested will be in the same sector and through the same asset class. You should consider spreading your investment risk and seek independent advice when you are not sure if an investment is suitable. You are not able to invest more than 10% of your net assets through The Prime ISA unless you are a high net worth investor, a certified sophisticated investor or a self-certified sophisticated investor.
You should be aware that if the return on the bond fails to pay a return that beats inflation, especially the real value of your savings could fall.
Non Ready Realisable Investment
Investors should be aware that the bonds you will invest in are non-readily realisable investments. Investment through the Prime ISA should be viewed as a long term investment.
It may be possible for the bonds to be sold but it may be difficult to sell the bonds held through the Prime ISA.