Home Alts News Red Oak Launches Another Regulation A+ Real Estate Bond Offering

Red Oak Launches Another Regulation A+ Real Estate Bond Offering

Red Oak Capital Fund V, a $50 million Regulation A+ Tier II bond offering sponsored by Red Oak Capital Group, has been qualified by the SEC and is open to investors.

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Red Oak Capital Fund V, a $50 million Regulation A+ Tier II bond offering sponsored by Red Oak Capital Group, has been qualified by the SEC and is open to investors.

The bonds are securitized by senior secured commercial mortgage notes and are backed by existing commercial real estate properties in the United States. Crescent Securities Group is the managing broker-dealer for the offering.

“We…capitalize on short-term gaps in the traditional commercial finance markets,” said Chip Cummings, Red Oak’s president. “Our fully integrated fintech platform enables us to rapidly perform credit and collateral scoring and efficiently allocate capital to smaller transactions with a clearly defined exit strategy.”

Red Oak Capital Fund V offers two series of bonds, A Bonds and A R-Bonds, priced at $1,000 with a minimum purchase of $10,000. The bonds will mature on December 31, 2026.

According to the fund’s offering circular, A Bonds bear interest at an annual rate of 7.5 percent and include a 6 percent sales commission, a managing broker-dealer fee of up to 0.95 percent, and a nonaccountable expense reimbursement of up to 1 percent to the managing broker-dealer. The company may pay a wholesaling fee of up to 1 percent.

The A R-Bonds bear interest at an annual rate of 8 percent, have no sales commissions, and include a managing broker-dealer fee of up to 0.95 percent and a wholesaling fee of up to 1 percent. The company may pay nonaccountable expense reimbursements of up to 1 percent.

Both series include an additional contingent interest payment at the end of the term, which could potentially increase the yield to investors.

Red Oak Capital Group, founded in 2015, (and its predecessor, Northwind Financial founded in 1998) originates, underwrites, and services short-term, senior secured stabilization loans on commercial real estate properties located in major geographic markets.

For more Red Oak Capital news, visit their directory page here.