Record highs for charity bonds on London Stock Exchange
Melanie May | 11 October 2016 | News
Current market conditions mean charities seeking to borrow finance should consider retail bonds according to Allia Impact Finance, which last month reported record highs in trading prices for charity bonds on London Stock Exchange.
This has created an opportunity for charities to borrow in the retail bond market at low rates, according to Allia, which says strong demand from socially responsible investors, combined with the drop in interest rates seen post-Brexit, means new borrowers can currently expect to come to the market at rates well below 4%.
Allia’s bond issuing platform, Retail Charity Bonds, has so far issued three bonds: to Golden Lane Housing, Hightown Housing Association and Charities Aid Foundation, and all have seen trading prices rising sharply in recent months according to Allia’s figures. The bonds pay a fixed rate of interest, meaning that investors paying a higher price will get a lower return on their investment.
Phil Caroe, director of impact finance at Allia, said:
“For charities looking to fund new projects or refinance existing debt, the current market conditions have created an opportunity to borrow at exceptionally low rates. The retail bond market provides a unique way to raise unsecured loan finance on very light terms, while also raising profile and connecting with a new pool of socially responsible high net-worth investors.”
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About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.