The loan

Around 80 per cent of the money invested in the East London Bond has been lent to Places for People Homes (PfPH), which will use the loan as part of its business of developing and maintaining affordable housing.

After five years, the total amount repayable under the loan, including interest, will equal the amount required by Citylife to repay bondholders in full.

The loan is assigned to an independent trustee, which means that the security for investors is based on PfPH’s ability to repay the loan, not on Citylife’s financial standing (see risks for more details).

About Places for People Homes

Places for People Homes (PfPH) is a not-for-dividend registered provider of social housing, regulated by the Tenant Services Authority. It builds, sells and rents homes and provides services and support to those who live in them.

PfPH is one of the largest property management, development and regeneration companies in the UK with a turnover in 2008/9 of £198 million and assets of £1.8 billion. It was established in 1965 and currently manages more than 44,000 homes.

PfPH has a credit rating from Moody’s Investors Service of Aa3 with a stable outlook. This means that its obligations “are judged to be of high quality and are subject to very low credit risk”.

The rating is composed of a baseline credit assessment of 8 (on a scale of 1 to 21, where 1 represents the lowest credit risk); and a high likelihood of support from the UK government (Aaa stable outlook) to prevent a default in case of need.

For more information about Places for People, including annual reviews and financial statements, see www.placesforpeople.co.uk.

For more about why Citylife believes the risks of investment in the East London Bond to be very low, see the risks.