News

7th May

Early Bath – Wasps’ Retail Bond Attracts Strong Support

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.

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