Bollywood filmmaker launches 6.5% retail bond
Indian filmmaker Eros International has launched a seven-year retail bond paying 6.5% in a bid to raise up to £100 million through the London Stock Exchange's (LSE's) Order Book for Retail Bonds (ORB).
Eros International's bond opened for subscription on Thursday and is available to private investors for a minimum investment of £2,000 and then in multiples of £100.
The bond pays an annual yield of 6.5% with the first payment expected to be made on 15 April 2015 and then every 15 October and 15 April thereafter until the bond matures on 15 October 2021.
Issuances of UK retail bonds have slowed this year. To find out why, and why demand for the products is still strong, read: Retail bond lenders struggle to find borrowers.
Founded in 1977, Eros International produces and distributes Indian language films globally, typically producing over 70 films per year that are released in theatres, on television and the internet. The firm is listed in New York and Mumbai and has a market capitalisation of over $800 million (£490 million).
Commenting on the launch, Jyoti Deshpande, chief executive officer of Eros, says: "We are delighted to announce the launch of Eros's debut retail bond in the UK. This bond provides exposure to a new sector for retail bond investors and will also enable Eros to diversify the sources and currency denominations of its funding."
The bond is expected to be listed on the LSE's ORB on 15 October. Authorised distributors include Money Observer's sister website Interactive Investor, as well as Barclays Stockbrokers and Redmayne-Bentley Stockbrokers.
Since its launch in 2010 the ORB has launched 45 new bond issues and six taps of existing issues, raising over £4.3 billion for listing firms.
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%.
A way of valuing a company by the total value of its issued shares and calculated by multiplying the number of shares in issues by the market price. This means the market capitalisation fluctuates continually as the value of the shares change in the market. For example, HSBC has 17.82bn shares in issue at a price of 646.2p making a market capitalisation of £115.15bn.