ICG unveils fixed-rate bond paying 7%

1 December 2011

Investors starved of real returns have been thrown another lifeline in the form of Intermediate Capital Group's (ICG) corporate bond paying 7%.

The bond will pay a bi-annual coupon of 7% until it matures in December 2018. It is available to buy through stockbrokers or wealth managers.

It will be listed on the London Stock Exchange and will trade on its Order Book for Retail Bonds (ORB). There are now 151 bonds listed on the platform.

The bond offer will remain open until 16 December and will be issued on 21 December, and has a minimum investment of £2,000.

Shareholder appeal

The ICG launch follows Tesco Bank, which unveiled an eight-year inflation-linked corporate bond on Wednesday, paying a coupon of 1% adjusted for changes in the Retail Prices Index (RPI).

How i got an 8% savings rate

Adrian Bell, head of debt advice and origination at Evolution Securities, which is acting as lead manager and distributor of the ICG bond, says the new bonds will appeal to existing shareholders of these companies and retail investors who see no other opportunities to protect their capital.

"Investors have the choice of opting for an index-linked bond or fixed-rate bond, both of which will protect your capitals and provide a real return," he says. "Not a single gilt can give investors that."

Bell adds that the double launch this week comes at a great time, commenting that the recent slew of bad news about the stock market will drive investors towards these products.

Bell hints at more competitive ICG bonds being issued next year, but admits that further deals "might not be as good".

This article was written for our sister website Money Observer


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