19th May

IPF with rare retail bond issue offering an eye-catching 7.75% due 2023

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Provider of home credit and digital lender International Personal Finance (IPF) is offering DIY investors a rare opportunity with a new retail bond offering an eye-catching coupon of 7.75% p.a.


The bonds will be traded on the LSE's Order Book for Retail Bonds - ORB - exchange and will pay interest twice a year until the bonds are redemption at their issue price in December 2023.

A minimum investment of £2,000 is required with multiples of £100 thereafter; the offer period is now open and whilst it is planned to close on June 7th, experience tells that significant demand from investors can see that offer period shortened.

Describing itself as a ‘home credit service’ for people ‘who want to borrow money quickly and in a manageable and transparent way’, International Personal Finance (IPF) operates in Poland, the Czech Republic, Slovakia, Hungary, Mexico and Romania, and offers short-term cash loans of £50 to £1,000 as well as a home collection service.

IPF is FTSE 250 listed and was floated on the London Stock Exchange in July 2007; it has 2.4 million customers and more than 7,000 employees.

As described in a series of articles on Retail Bond Expert, IPF previously issued a retail bond offering 6.125% in 2013, and subsequently topped it up:

IPF hopes for high level of interest with 6.125% Retail Bond launch

IPF retail bond closes early at top end of expectation

A Loan Again, Naturally? IPF Seeks to Repeat 6.125% Retail Bond Success

The deal is open to new investment, with holders of the existing IPFLN6.125% 2020 offered the opportunity to extend into the new bond by offering a par-par switch with a fee payable of 1.5% to those extending their bonds. Rolling the fee into the price, this would be equivalent to exiting on a yield of 4.51% and locking in to 7.75% for the new four-and-half year bond.

The bonds are from the existing programme, senior unsecured and pari-passu with other debt; the expected rating is BB (Fitch) and BBa3 (Moody’s)

With the London Capital & Finance issue still raw, retail bonds are listed on the stock exchange and are considered to be safer than mini-bonds, which are unlisted and unregulated. However, investors’ money is not fully safe even with retail bonds as they are not covered by the Financial Services Compensation Scheme.

Michael Dyson of BondCap, a specialist bond provider, said the bond was not without its risks but its high interest rate was attractive.

Only a few new retail bonds have been offered to private investors in recent years; in July 2018 Regional Reit, an investment trust, issued a bond paying 4.5% and charity Belong listed a 4.5% to help fund dementia care and the construction of retirement villages.


Further details can be found in the prospectus, the supplementary prospectus, the cash offer document and the information booklet and are summarised hereunder:



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