TRANSPORT group Stobart today entered the retail bond market in an offering that will raise s25m.
Investors can buy bonds in multiples of s100 with a minimum investment of s2,000 and will receive a fixed rate of 5.5% for six years, with payments made half year.
Stobart chief financial officer Ben Whawell told the Post that the group, which employs about 1,000 staff at its Warrington transport base and its Widnes multi-modal operation, is the first industrial superbrand to enter the UK retail bond market.
Big players such as Tesco have issued bonds in the past, but he said Stobart had been approached quite a lot to look at this market because of our brand.
He said the board took the decision to wait for the market to mature before dipping its toe.
Mr Whawell added: We went out on roadshows and people told us it is quite small for a bond, but we anticipate a big demand out there. It is aimed at high net worth individuals.
He explained the bond is another way for the group to diversify its funding: It is a new market to look at and we have gone into it to get the name out there, and it could be a future source of funding.
It sits well alongside other forms of debt in our business and for investors it is a better return than putting money in the bank.
He said the proceeds will go towards general commercial use.
The firm has been granted planning permission to expand its operations at Carlisle Airport and it is bidding for planning permission to develop a biomass plant at its Widnes site, as well as seeking to develop the warehousing and transport potential at the riverside location.
Mr Whawell said Stobart could return as early as next year to the retail bond market: We could look at it in the future, next year, depending where all our projects are up to.
If it is very successful it puts us in good stead going forward.
The bond is listed on the London Stock Exchange from today and can be bought and sold on that market. The offer will remain open until November 27, but could close earlier.