A Secured Note with PG is a form of preferred debt within the capital stack of UK property development finance. It typically holds a second charge over the project assets and includes a personal guarantee (PG) from the developer or company director. This structure provides enhanced security for investors by combining asset-backed protection with personal liability. It’s used to increase lender confidence in subordinated positions and is often deployed in scenarios where developers seek higher leverage while offering additional comfort to bridge or mezzanine lenders. Returns are fixed, and repayment is prioritised over equity interests.
Secured Note with PG sits within the subordinated secured layer of the capital stack, where fixed return debt instruments are structured to enhance investor protection through both asset security and personal liability support from the sponsor. Compared with a Fixed Return Priority Note, it typically carries similar return mechanics but adds additional credit comfort through the personal guarantee framework governed by Guarantee and Indemnity arrangements. Lenders often evaluate sponsor resilience using measures such as the Sponsor Liquidity Buffer, ensuring sufficient headroom to support obligations in downside scenarios. This structure therefore blends secured positioning with enhanced enforcement pathways, improving recoverability without altering its subordinated ranking.
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