Some hours ahead of
the planned deadline of 5pm on 6th May, Wasps announced that the
offer period of its retail bond was closed having achieved its target of £35m target
in just ten days.
The bond will begin
trading on the LSE’s Order Book for Retail Bonds on 14th May and
this raise catapults Wasps to the top of the list of the world’s wealthiest rugby
clubs.
The Aviva Premiership
club moved Coventry's Ricoh Arena in December, and its future business plan is
based upon a wide range of revenue streams away from the pitch including
conferences, events and leisure.
David Armstrong, Group Chief
Executive of Wasps, said ‘We are delighted at the success of our debut Retail
Bond which was fully subscribed, and at reaching our maximum target of £35
million. This is the first time a sports club has accessed the market in this
way and the response from investors, both institutional and private, has been
very positive.’
‘The funds raised will enable us to
restructure our balance sheet and pay down our existing debt, including the
loans we acquired with the Ricoh Arena. We now have a solid foundation for the
long-term future of the Club and look forward to the future with confidence.’
This represents a
significant turnaround in the fortunes of a club that flirted with insolvency
in 2012 and it is expected that other sports businesses will be watching
developments with interest.
Mr Armstrong says
they now have ‘a solid foundation for the long-term future of the club’ and
that they expect to eclipse French rugby royalty Toulouse in terms of revenue ‘either
at the end of this season or next season.’
London Wasps
Holdings showed a loss of £22m last year; however, now minus the ‘London’, the
club has acquired the Ricoh Arena on a 250 year lease from Arena Coventry Ltd
and in addition to a 32,600-seater stadium boasts a 40,500 capacity events
venue, casino, restaurants and a hotel.
Home gates since
its move to the Midlands have nudged 20,000 and following a successful European
campaign, the club is looking forward to attracting a record capacity home
crowd at the weekend when it hosts new neighbours Leicester Tigers with a play
off place still a possibility.
The success of
Wasps’ bond delivers further proof of the demand that exists in the sector as
retail investors seek income in what continues to be a low interest economy.
Charitable housing
provider the Hightown Praetorian and Churches Housing Association recently
raised £27m through the issue of its Retail Charity Bond – nearly three times
its initial target.
HPCHA will use
the funds to build new homes, although a spokesman for the organisation was
unable to say how many it would be able to develop using the money.
The bonds,
available for a minimum subscription of £500, will pay a fixed rate of interest
of 4.4% a year and mature in 2025.
David Bogle, chief
executive of the charity, said: ‘We’re delighted the bond issue has been so
successful. Affordable homes are in very high demand in our area, and it will
help us fund the work we do in providing high-quality homes to homeless people
and those who cannot afford to rent or buy at market rates.’
The Retail Charity
Bonds platform was created by Allia, a charity that specialises in developing
social investment opportunities, in association with the financial services
firm Canaccord Genuity.