RBS launches inflation-linked bond

Published by Cathy Adams on 07 November 2011.
Last updated on 13 January 2012

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Royal Bank of Scotland has issued an inflation-linked bond on the London Stock Exchange's Order Book for Retail Bonds (ORB).

The bond, which has a seven-year maturity, pays a coupon of 2% adjusted in line with the Retail Prices Index (RPI). It is available in denominations of £1,000.

Boon to savers

David Stuff, UK director of listed product sales at RBS, says the new bond will be a boon to savers hunting for real returns in a high inflation and low interest rate environment.

The UK Inflation Income Bond is the sixth bond to be issued by the bank on the ORB platform.

Pietro Poletto, head of fixed income at the LSE, says: "There is a growing demand from private investors for new bonds and inflation-linked products have proved popular this year."

He adds: "ORB continues to draw new bond issues to the market and is steadily creating a wide choice of products for retail investors."

The ORB was launched in February 2010 in response to strong private investor demand for retail-sized bonds. There are more than 150 bonds available on the ORB, typically tradable in denominations of £1,000 or less.

This article was written for our sister website Money Observer

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