News

15th Mar

5% Retail Charity Bond Could be Magic for Those Seeking Income

 

Alnwick Castle is the second largest inhabited castle in Britain; home to the Duke and Duchess of Northumberland for more than 700 years, it is recognised worldwide having been used as a venue for both Harry Potter and Downton Abbey; it is now launching a retail charity bond.

 

Set in 100,000 acres of land in a region of the country that has been economically depressed for decades, 25 years ago, the Duchess of Northumberland decided to use some of that acreage to help local communities setting up the Alnwick Garden Trust, and using the income to fund a range of programmes to help young and old in the local area.

Now the Trust is seeking to raise between £10m and £15m by launching a ten-year retail charity bond, paying a 5% coupon; there is a minimum subscription of £500, with multiples of £100 thereafter.

Interest will be paid semi-annually in arrears on 27th March and 27th September, coupons with full redemption on 27th March 2030.

The Bonds will be issued by Retail Charity Bonds PLC and the funds raised will be loaned, via a loan agreement, to The Alnwick Garden Trust.

At any time during the life of the Bond, investors are permitted to sell the Bonds (within market hours and in normal market conditions) on the open market through their stockbroker.

 

Key documents can be found here:

 

 

 

 

Issuer Retail Charity Bonds PLC
Charity Borrower Alnwick Garden Trust
Instrument Bond secured on a loan to Alnwick Garden Trust
Currency GBP
Nominal Amount GBP [●]
Retained Bonds GBP [●]
Ratings Unrated
Repayment Bullet
Early Redemption Gilts + 50bps [100 per cent. of the outstanding principal amount of the Bonds to be redeemed multiplied by the price]
Coupon 5% Semi-annual in arrear
Coupon Dates 27 September and 27 March
Announcement (Launch) 4 March 2020
Offer Period 4 March to 20 March at 12pm
Signing Date 25 March 2020
AD Commission 0.25%
Issue/Settlement Date 27 March 2020
First Day of LSE/ORB trading 30 March 2020
Expected Final Maturity Date 27 March 2030
Legal Final Maturity Date 27 March 2032
ISIN Number XS2132997433
SEDOL [●]
TIDM AGT1
Issue Price 100
Denominations GBP100
Interest Day Count Fraction Actual /Actual
Business Day Convention Following Unadjusted
Listing London Stock Exchange, ORB
Series Number 9
Selling Restrictions Only to be sold into UK, Isle of Man and Channel Islands
Lock- up/ Seasoning None
Governing Law English law
Settlement Euroclear, Clearstream
Lead Manager Allia C&C

 

300,000 visitors come to Alnwick Garden every year to see attractions such as the largest treehouse in the world, the world’s biggest Taihaku cherry orchard and the poison garden, where every plant can be fatal.

The Trust operates programmes such as Roots and Shoots, designed to combat obesity by teaching children about healthy eating and active lifestyles and a Drop In Centre, where lonely older people can socialise.

It also runs drug education programmes, and gardening therapy for people with learning difficulties; funds raised by the Alnwick Garden Trust Retail Charity Bond will be used for a new attraction, the Lilidorei Project which is part funded by a government grant. The all-weather play village is expected to add more than 250,000 visitors to Alnwick, allowing it to expand its social programmes.

The project will create almost 300 new jobs, 80% of which will be filled by veterans from the Armed Forces; the Trust has a track record of revenue generation, with over £5m of sales last year and a surplus of £251,000 after costs.

Retail bonds have proven extremely popular with retail investors, and particularly given the recent extreme market volatility caused by global uncertainty over the Coronavirus, this relative comfort of a guaranteed 5% p.a. return is likely to appeal to those seeking income.

However, with such reward comes inevitable risk, and whilst would-be investors can be reassured by the bond’s listing on ORB, and the structure of Retail Charity Bonds, it is important to understand the risk you will be exposed to.

Plenty of further information can be found throughout Retail Bond Expert

 

Authorised Offerors:

 

For more information on DIY investing for income:


 

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