What is this Bond for?
After almost 30 years, the Dons are coming home. AFC Wimbledon are building a new stadium on Plough Lane and aiming for it to be ready for us to play there in time for the 2020/21 season.
In the very near future we need to sign a final construction contract with the building contractor, so that we can finish the stadium to design and on time. To do this we need to be sure that we have the funding available. This money could come from bridging loans or large sums provided by individual investors. But commercial lending for the total amount will require high interest rates and the investors will require control of the club, which has been fan-owned since it was re-formed in 2002.
Therefore the supporters, who own the club through The Dons Trust, have decided to seek funding from the community in the form of a Fixed Term Bond, which can offer bondholders more interest than banks pay them - but at lower rates than the club will pay on commercial loans.
Why is this happening now?
The overall stadium construction costs are £31m. £20m of this total funding required is already in place including the 2019 Seedrs crowdfunding equity campaign. The remaining shortfall of £11m is higher than originally planned.
It was always known that more money would need to be raised. Now that time has come, and that the amounts are known, we need to find the best way to raise it.
External investors have offered to fund some, but not all, of the £11m required. But their terms would bring an end to a principle that has guided us through the past 18 years, which is that the Dons Trust (and therefore the fans) must have majority control.
Prior to the launch, research revealed substantial interest in the Plough Lane Bond, since it offers the opportunity to potentially achieve a good return on savings for investors. By the initial deadline of 14th February, more than £4.5m of Bonds have been applied for, so we have decided to extend the scheme and continue looking for more investors.
We believe that there is enormous goodwill towards a scheme to help us build our new ground and this “final big push” for funding will contribute to securing the future of AFC Wimbledon and its fan-owned model.
The Bond is a loan, rather than a donation or investment.
How much will the Bond raise and what are the terms?
The initial aim was to raise at least £5 million through this Bond, towards the £11 million required to complete construction. The Bond will now remain open and continue to take investments beyond this point. The amount this Bond issue generates will reduce the commercial loan required to build the stadium. The upper limit is £11 million or the amount required to complete the first stage of the stadium.
The minimum investment is £1,000, with no maximum.
Interest rates are offered between 0% and 4%, payable annually over 5, 10 or 20 year terms.
The amount you invest is returned to you at the end of the term.
It helps the club and Trust more the longer the term of the Bond you purchase and the lower the interest rate you select.
Who can invest in this Bond?
The more we can raise from supporters of the club, the better. But this Bond is open to everyone – fans of other clubs and, in fact, anyone just looking to contribute to the objectives of the Dons Trust and do something positive with their money. In Wimbledon and beyond.
Who is this Bond suitable for?
You should not invest any money into this Bond if you cannot afford to lose it. Whilst AFC Wimbledon have enjoyed considerable success since formation and there should be new revenue streams from a new larger ground, there is a risk that the Dons Trust will not be able to pay the interest or repay the bond.
During the Bond offer period, volunteers will be helping to support this issue and a call-back service will be available.
How long is this Bond issue open for?
The Bond was launched in January 2020 with an initial deadline of 23:59 on 14th February 2020. We have decided to continue to take further applications and issue further Bonds after this date because every Bond investment taken out enables the club and Trust to benefit from a stronger overall position to secure and fund stadium construction.
Who, specifically, is issuing and adminstering the Bond?
The Bond is being issued and administered by the Dons Trust, the not-for-profit, democratic organisation which owns AFC Wimbledon. It was conceived and developed by a group of fans working with the Dons Trust Board and club to provide alternative routes to keeping the stadium construction on track without the fans losing control of the club.
What will my money be used for?
All of the money generated by the Bond will go towards the financing of the new stadium in Plough Lane. It will be lent by the Dons Trust to one or more of AFC Wimbledon's operating companies to achieve this.
What will the club do to raise the rest of the money?
The club and the Dons Trust are pursuing all opportunities for commercial debt. A group of fans who are specialists in this area are also contributing to the efforts to raise any additional money required to complete the stadium. The greater the amount raised from the Bond the less the amount required from commercial lenders and the higher the likelihood that the remaining balance will be sourced successfully. We will ensure any further news on funding avenues being explored or offers of funding being secured is shared as soon as possible.
Can the club service this debt?
The Dons Trust will pay interest to bondholders and repay the bonds when they come due using funds generated by the Club’s operations. If the Club does not generate sufficient revenue and profits to pay all its contractual obligations, service commercial loans (if there are such loans) and stay within the operating limits that commercial lenders may require, then the Dons Trust will not be able to pay the interest or repay the bonds.
The interest rates under the Bond are lower than short-term commercial lending rates and so the Bond improves the Club’s position compared to servicing a large commercial debt. Matchday revenues will increase in a larger stadium and also non-matchday revenue will be generated in its facilities.
How will my money be protected?
The Bond will be protected by a corporate guarantee. It is important to understand that this will sit behind any senior commercial lenders and for prudence your Bond should be considered unsecured.
How and when can I get my money back?
At the end of your chosen term length. We have set a minimum of 5 years for the bond, which allows the club enough breathing space to complete the stadium, begin realising new revenues and combining those to raise new and longer-term finance. So, if you choose 5 years, the Dons Trust plans to pay your money back at the end of that period. We have also opened up the option of 10 years and 20 years. The more money the club can borrow at advantageous rates, the more it will have available for operational and playing budgets.
What if I’m happy to loan the club money for longer than the original term?
One year prior to the Bond maturing (so after 4, 9 or 19 years), we will ask if you wish to redeem your bond or create a new term for your existing investment. The longer term lending you are able to provide, the more you will be helping the club.
Can I switch my money from Seedrs to the Bond?
No. This Bond is part of the debt package that is required to fund the stadium and so needs to be added to those existing committed share ownership investments made through Seedrs.
Can I transfer over my existing Dons Trust Bonds?
No. This scheme is a new bond issuance with separate terms and conditions and a different adminstration process. If you have any queries about an existing Dons Trust Bond that you currently have please contact firstname.lastname@example.org.
What interest can I earn on the bond?
We have offered flexible rates of interest so that individuals can choose what they would like to receive, between 0% and 4%. Obviously the lower the interest rate chosen, the better it is for the Club.
Are Bonds transferable?
Only with the specific written permission of the Dons Trust which would only be granted at its discretion and then only by changing ownership of the Bond to a specific named individual. The Dons Trust will consider requests on a case by case basis. The Bonds are not freely transferable.
Can I purchase Bonds for other people (e.g. children)?
We have now added the function to purchase bonds for other people including children. On the buy bonds page, please click on "This Bond is for" and select "someone else as a gift". The certificate will be issued with the name of the purchaser and the name of the recipient. You can then enter the bank details for interest and capital repayment of your choosing.
All interest payments are made gross of tax so it's up to the recipient who is designated the beneficiary for tax purposes and to include any income from interest as part of a tax return or not as required.
Please note that the right to change any payment details etc remain with the bond purchaser. If you would like at some point to put the bond solely into the name of the recipient, you will need to contact The Dons Trust asking for a transfer of ownership to be granted as above.
If you have any further questions, please contact us.
What happens to my investment if I die before the redemption date?
Bonds are fixed-term investments and as such cannot be redeemed early. In the event of a Bondholder dying before the end of the term of their Bond, it would then form a part of their estate, and then be payable upon maturity.
Can I get my money back if The Dons Trust loses control of the club?
Yes, if the Dons Trust were to lose majority control of the Club you would be given the option to have your bond redeemed. You can indicate if this will be your preference on the application form. The aim of the Plough Land Bond is to raise enough money when combined with improved commercial lending to allow the Dons Trust to maintain majority control of AFC Wimbledon whilst keeping the stadium construction on schedule.
Can I invest in this Bond from outside of the UK?
The Bonds are offered in Pounds Sterling and adminstered in the UK. Purchases can be made from outside the UK - when you complete your application form you can request international payment details. If you have further questions about this please email us.
Can I buy different Bonds at different interest rates and terms?
Yes. You are free to choose different interest and term combinations across multiple bonds.
What if I can’t get access to my money in time for the date of the Bond close?
Please get in touch with us. We welcome all investment into this Bond scheme, although at present our focus is to maximise the amount we raise before the end of February 2020.
What if I don’t have £1,000 to invest?
The minimum investment for the Bond at £1,000. There is a significant level of admin and management required to run this properly and sums below this within this scheme are not as viable. There is nothing to stop people coming together with smaller amounts to make up this minimum level, although Bonds can only be issued in one name. The We Are Wimbledon Fund is exploring routes for smaller levels of investment, on behalf of the Dons Trust. For more info please email email@example.com
Can I invest into the Bond using my SIPP or SAAS pensions?
You will need to check with your pension provider or pensioner trustees as to whether or not they will allow such an investment to be held, but this has not been specifically designed for this purpose and we do not provide any advice as to whether or not this is a suitable asset for your pension.
Is this Bond a better deal for the club (and fans) than outside investment?
The group who conceived this Bond think that the equity offered by the investors comes at a high price - removing the Dons Trust’s guaranteed majority control of the Club. The Bond allows us to borrow money at highly favourable terms, complete the stadium and then look at longer term refinancing, while maintaining control of the club.
Once the stadium construction is assured, members and fans can then debate what changes to the overall club and Trust model could be made, including the possibility of outside investment stakes in the future. We recognise there are a range of opinions as to what people’s preferred structure may be.
What should I do if I think the club needs to take outside investment in the future?
Support the bond! Once the stadium is constructed, there are further avenues of funding available to the club. If the stadium is completed on time and funded through a combination of the Plough Lane Bond and commercial lending, then the Dons Trust will be able to debate accepting outside investment without the time pressure of the stadium construction being under jeopardy. Any change in structure will be voted on by all Dons Trust members.
What else is the club doing to address the funding shortfall? How can I help?
The plan is to provide the £11m funding in total through a combination of this bond and commercial lending. The first thing everyone can do to help is encourage take-up of the bond. If we raise the full £11m there will be no need for any commercial lending. Since December last year, fans who work in finance have come forward to assist in providing more commercial avenues to explore. If you can help, please email us and we will put you in touch with the right working group.
How secure are my bank details?
As administrators of the Plough Lane Bond, we will at some point need your bank details to both repay your capital and pay you interest. Your account details can be left with us either as your buy your bonds or later via your profile pages.
All communication between the Plough Lane bond website and your web browser is securely encrypted as is all communication between the website and the bond administration. Whilst on the server, all bank details are encrypted using industry standard multi-key cryptography libraries employing unique keys for every set of details. Only you and a single trained staff member can, at any point, directly view your bank details. Logins to the administrator account on ploughlanebond.com is protected by multi factor authentication. The server itself is subject to weekly third party testing to ensure the highest level data security.
Is the issue of the Bond subject to financial promotion restrictions?
No. Financial promotion restrictions do not apply to any communication by a co-operative or community benefit society pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 Article 35. The Bonds are not transferable and do not therefore fall within the scope of prospectus regulation.