Government to lower RCB limit to £5 million
Melanie May | 3 December 2021 | News
The UK Government has announced that it will lower the limit for RCB issues to £5 million, opening up the bond market to smaller borrowers.
RCB is a bond issuing platform, created by Allia to raise debt finance for charities and impact organisations through bonds listed on London Stock Exchange. By the end of this year it will have issued more than £375 million of bonds for charities including Golden Lane Housing, Greensleeves Care and The Alnwick Garden Trust. Golden Lane Housing for example raised £11m this year through one social bond offer.
The bonds are issued by RCB Bonds PLC, a securitisation company. Under the current regulations, securitisation companies can only issue a minimum of £10 million at a time.
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In May this year the Government launched a consultation on potential changes to the regulations on taxation of securitisation companies. Amongst other points, it asked respondents for their views on lowering the minimum issue size. Allia C&C, the Impact Investing Institute, Big Society Capital and Social Enterprise UK submitted a joint response arguing for a lower limit of £5 million.
This week the Government published its response to the consultation, acknowledging the strong support from the charity and social impact organisations sector for lowering the threshold, and agreeing that it should be reduced to £5 million.
Adrian Bell, Chief Executive of Allia C&C, said:
“We’re delighted with this result, which comes after seven years of lobbying for change. RCB was created to make it possible to raise small amounts through listed bonds, and the reduction in the threshold to £5 million will now open up the bond markets to many more smaller borrowers.”
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.