Icap unveils fixed-rate bond paying 5.5%

6 July 2012

FTSE 100-listed financial services broker Icap has launched a six-year retail bond paying 5.5%.

The corporate bond, which will pay the coupon twice-yearly on 31 July and 31 January, could also benefit from an uplift in interest rate of 1.25% boosting the coupon to 6.75% if the bond's credit rating drops significantly.

The bond is expected to be rated BBB+ by Fitch and Baa2 by Moody's, which puts it in the lowest bracket of investment grade.

It is understood that Icap wants to raise £50 million from the issue.

The bonds will be sold in £100 increments, and the minimum investment is £1,000. It will be available through stockbrokers and wealth managers.

Applications for the bond will close on 24 July, and it is expected to list on the London Stock Exchange's Order Book for Retail Bonds (ORB) on 31 July.


Lauren Charnley, stockbroker at Redmayne-Bentley, says the bond is likely to attract interest "given the stability of earnings and net profit Icap has demonstrated over recent years".

Investor demand for retail bonds shows no sign of abating. Earlier this week, healthcare property firm Primary Health Properties closed its retail bond issue five days early, after hitting its £75 million target.

Other recent retail bond issues include Severn Trent, which listed on the ORB this week after raising £75 million, and Tesco Bank, which unveiled its third retail bond in May.

This article was written for our sister website Money Observer


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