Published on April 25th, 2014 | by Scott Cooney0
Retail Bond Success Stories for Green Investments
Retail bonds are a fairly new product within the context of the UK’s financial market, and are fast becoming one of the success stories of the 21st Century. Amid the doom and gloom of the economic downturn, there’s a new kid on the block that can spell success for the small, private investor.
The London Stock Exchange gave birth to the retail bond when it launched the Order Book for Retail Bonds (ORB) in February 2010 as a way of giving private investors easy access to a cost-effective, efficient and transparent method of trading bonds across a varied range of fixed income UK securities.
Even in its infancy, ORB is attracting positive attention from financial pundits in the UK, and there have been plenty of success stories which make for a great progress report for this new fiscal wonder child.
Supermarket giant Tesco raised £200 million in just two weeks of marketing its bond issue – with the 5% interest on offer ensuring popularity with customers across the UK. That’s a great offer in your trolley as you tramp down the supermarket aisles on the lookout for BOGOFs and cut price store cupboard essentials.
Primary Health Properties is a real estate investment trust (REIT) specialising in leasing GP surgeries, and its bond issue represented a really healthy investment offering interest at 5.375%. Overall performance was so successful that the bond hit its funding target of £75 million five days early.
Ecotricity, the green energy supplier, electrified investors in 2011 with a four year bond paying up to 6.5% – and the offering was so popular that it was oversubscribed, as investors hustled to join in.
Last year, leading renewable energy firm CBD Energy raised £7.5 million to invest in UK projects with its Secured Energy Bonds offering. Offering investors a return of 6.5% over three years, this brought a buzz to the clean, green energy market, especially as it will help reduce the UK’s carbon emissions – it provides cheap energy and an income from the Feed-in Tariff for selected businesses across the UK.
All in all, the new kid on the investment block – the retail bond – shows signs of growing into an important player in the Financial Services market. The LSE’s order book has made incredibly healthy progress – from £66 million of funds raised in 2011 to a whopping £251 million last year.
This post was sponsored by Energy Bonds, a green investment offering allowing individuals to help launch clean tech projects around the world. Check them out at EnergyBonds.co.uk!
Photo from Shutterstock