23rd Oct

London Stock Exchange retail bond closes early

As further proof of the burgeoning popularity of retail bonds the London Stock Exchange Group (LSE) offer with a coupon of less than 5 per cent has closed early due to popularity.

The LSE announced in October that it would issue a corporate bond paying investors interest of 4.75% per year for nine years, maturing in 2021. Minimum investment into the bond is £2000.

The LSE has informed brokers that the offer period on the bond which started on October 16th and was originally scheduled to close at 12:00pm on October 13, will now close early at 10:00am on October 24th.

The current offer is the first retail bond to be issued with a coupon below 5 per cent, but demand started strongly. Investors appear to be attracted by the quality of the LSE name whilst still getting a return significantly above that found in cash deposits.

The LSE bond continues the recent trend of issues having closed early; with historically low rates of interest, investors looking for yield are turning to these types of investments for income.

As with any investment, it is important for investors to understand what they are investing in and the risks include the capital value of bonds which can fall in value if cashed in prior to maturity.

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