ICG unveils second retail bond, paying 6.25%
Intermediate Capital Group has launched its second retail bond, paying a fixed coupon of 6.25%.
The bond will mature in September 2020 and will pay interest twice a year, in March and September.
ICG is a fund manager and specialist lender that is listed on the FTSE 250.
Philip Keller, managing director and chief financial officer of the firm, comments on the launch: "Following the positive performance of our first retail bond last December we are pleased to return to the market with this second launch. Given the company's strong balance sheet we believe that this bond provides an excellent opportunity to invest in the group at an attractive level."
The bond offer is expected to remain open until 12 September but may close earlier. They are expected to issue on 19 September and to trade on the London Stock Exchange's Order Book for Retail Bonds.
Once issued, the price of the bond will fluctuate. Although the coupon remains fixed, changes to the price will affect the yield for investors buying the bond after it has been issued. Investors can buy or sell the bond at any time on the open market once it has been issued.
The bond is a corporate bond, rather than a savings bond, which means that should ICG default or become insolvent, investors may lose some or all of their investment.
This article was written for our sister website Money Observer
The general term for the rate of income from an investment expressed as an annual percentage and based on its current market value. For example, if a corporate bond or gilt originally sold at £100 par value with a coupon of 10% is bought for £100 then the coupon and the yield are the same at 10%, or £10. But if an investor buys the bond for £125, its coupon is still 10% (or £10) and the investor receives £10 but as the investor bought the bond for £125 (not £100) the yield on the investment is 8%.
An individual employed by an institution to manage an investment fund (unit trust, investment trust, pension fund or hedge fund) to meet pre-determined objectives (usually to generate capital growth or maximise income) in prescribed geographic areas or investment sectors (such as UK smaller companies, technology or commodities). The manager also carries the responsibility for general fund supervision, as well as monitoring the daily trading activity and also developing investment strategies to manage the risk profile of the fund.
Corporate bonds are one of the main ways companies can raise money (the other is by issuing shares) by borrowing from the markets at a fixed rate of interest (the reason why they are also known as “fixed-interest securities”), which is called the “coupon”, paid twice yearly. But the nominal value of the bond – usually £100 – can fluctuate depending on the fortunes of the company and also the economy. However it will repay the original amount on maturity.