Red Oak Capital Fund IV, a $50 million Regulation A+ bond offering sponsored by Red Oak Capital Group, has been qualified by the SEC and is now open and receiving subscriptions.
Similar to Fund III, which reached capacity after two months, the offering is a Regulation A+ Tier II bond offering but has been expanded to offer four different options for investors.
Also similar to their previous products, the offering includes an additional contingent interest payment at the end of the term which increases the yield to the investor, the company said.
“We purposely held this offering back a few months to allow us to strengthen and build our internal operations,” said Chip Cummings, CEO of Red Oak. “This allows us to more effectively and judiciously deploy the capital and maintain the quality within the asset portfolios.”
The issued bonds are securitized by senior secured commercial mortgage notes, backed by existing income-producing commercial real estate properties located in the U.S.
Red Oak Capital claims to take advantage of short-term gaps in the traditional commercial finance markets and specializes in lending on smaller commercial real estate transactions with defined exit strategies.
“By combining our automated underwriting engine with manual processes conducted by experts with 30+ years of institutional quality underwriting experience, we are able to source and underwrite a vast amount of high-quality commercial loan opportunities,” added Joe Elias, chief technology officer. “This pipeline of senior secured, cash flowing commercial real estate assets, combined with our commitment to controlled growth allows us to maintain the quality of the portfolios, while meeting the demand for quality fixed income products.”
Established by the SEC in 2015 under the JOBS Act, the Regulation A+ Tier II offerings allow companies to sell up to $50 million in securities within a 12-month period. In addition, it requires regular financial filings and annual audited financial statements, which creates greater transparency for investors.
Crescent Securities in Dallas serves as the managing broker-dealer for the offering. The national firm of UHY is the auditing firm, and the securities firm of Kaplan Voekler Cunningham & Frank acts as counsel.
Red Oak Capital Group is a private equity firm specializing in direct lending within the commercial real estate industry.