London Stock Exchange retail bond closes early

The offer on a London Stock Exchange retail bond with a coupon of less than 5 per cent has closed early due to popularity.

The London Stock Exchange has announced in October that it would issue a corporate bond paying investors interest of 4.75% per year for nine years, maturing in 2021. Minimum investment into the bond is £2,000.

The London Stock Exchange Group has informed brokers that the offer period on the bond which started on October 16 and was originally scheduled to close at 12:00pm on October 13, will now close early at 10:00am on October 24.

A spokesman for the London Stock Exchange says that this shows the popularity of the bond.

Hargreaves Lansdown head of equities Richard Hunter says: “Although the current LSE bond is the first retail bond to be issued with a coupon below 5 per cent, demand from investors has started strongly. Investors seem to be attracted by the quality of the LSE name whilst still getting a return significantly above that found in cash deposits.

“The majority of recent issues having closed early. With interest rates so low, investors looking for yield are turning to these types of investments for income. As with any investment, it is important for investors to understand what they are investing in and the risks include the capital value of this bond can fall in value if cashed in prior to maturity.”