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Property investment company launches retail bond at 5.5%

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Property investment company, CLS Holdings, has launched its first-ever UK retail bond paying 5.5%.
Property investment company launches retail bond at 5.5%

The seven-year sterling bond will pay interest twice a year at an annual rate of 5.5%, with the original face value of the bond returned to the investor once the bond matures in December 2019.

Investors are required to invest a minimum of £2,000, and the bond will be eligible for tax-free ISAs and Sipps.

The bond is open to investments from 22 August 2012, with the deadline for retail investors at 5pm on 4 September.

However CLS has said that there is a possibility of the bond being closed earlier than the deadline depending on how much interest it attracts.

It is understood that CLS is aiming to raise around £50m from the launch of its retail bond to put towards ‘general corporate purposes’.

Once bought, investors will be able to trade the bonds on the London Stock Exchange’s Order Book for Retail Bonds (ORB) shortly after the closing date.
Canaccord Genuity has been appointed lead manager of the bond.

Adrian Bell, head of debt markets UK at Canaccord Genuity, said: “At first it was a real struggle to get investors to take this market seriously.

“But the retail bond market is broadening out and has broadened out to the extent that slightly higher-net worth individuals are also investing in it.

“I think this market has a potential to grow substantially within the next 12 months up to anywhere around £5bn.”

CLS has properties in London France, Germany and Sweden worth over £900m and is said to secure the majority of its rental income from governments or major corporations.

The group reported a pre-tax profit of £27.1m for the first half of this year, having made £37.7m in 2011.

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