Consumer lender issues 6.25pc retail bond
Aim-listed consumer lender Orchard Funding Group has launched a retail bond offering, with returns of 6.25 per cent.
The bonds will mature on 2 June 2027, and will pay out a fixed rate of interest twice yearly, on 2 December and 2 June.
They are available to both wholesale and retail investors through a number of authorised offerors. The bonds have a minimum investment of £2,000, and are available thereafter in multiples of £100.
This represents the first bond issuance for Orchard Funding Group, as it seeks to diversify its sources of capital.
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“In order to diversify both our sources of capital and our product breadth, I am delighted to be launching what I hope will be the first of our corporate bonds on the London Stock Exchange,” said Ravi Takhar, chief executive of Orchard.
“When these bonds are free to trade, investors will have the option to invest in both the equity and debt of our business.”
Orchard Funding Group specialises in financing consumer loans which are used to pay an essential or important annual fee. These may include site fees for caravans or mobile homes, private school fees, or golf fees.
It commenced trading in 2002 and became listed on the Aim in 2015. It has lent more than £683m with the support of backers such as NatWest and Toyota Financial Services.
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Convexity Capital is acting as lead manager on the bond launch, and will deal with all institutional investor queries.
“Orchard’s debut bond is an important step for the business,” said Michael Smith, managing partner at Convexity Capital.
“It augments the company’s existing banking lines, provides diversification and importantly, it’s longer-dated capital.
“This bond is also important for the wider UK capital markets as we move into post-Brexit world. It’s important that businesses of all sizes have access to the capital markets to facilitate growth – and there is nowhere more appropriate for a UK listed business to raise listed debt than on the London Stock Exchange.”
The bond offer will remain open until 12 noon on 23 February 2022.
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