Credit lender IPF seeks to extend retail bond

Investors will get a return of 6.125 per cent on their money in seven years’ time and must spend at least £2,000 to subscribe.

Gerard Ryan, IPF’s chief executive, said: “Our strategic objective of diversifying our funding is taking another step forward. Our retail bond earlier this year was heavily oversubscribed, and re-opening this bond issue gives investors who missed out another opportunity to invest in the on-going success of IPF.

“The re-opening of an existing issue, which is the first such extension in the UK retail bond market, will also bring benefits of increased liquidity.”

Earlier this year IPF raised £70m from its first retail bond. The move followed in the footsteps of former sister company Bradford-based Provident Financial and retailer Tesco, which have also turned to the retail market to diversify their finances.

The bond will mature in 2020, which gives investors well over the five-year period needed for ISAs. Retail bonds are proving increasingly popular with investors who want a safe haven for their money with much better interest rates than traditional banks.

Daniel Aitkenhead, head of communications at Killik & Co, said retail bonds appeal to people who want certainty of income. He said shorter terms of seven years also appeal to investors.