IPF's new move to fund its lending

It will be the first time the Leeds-based group has ventured beyond bank finance to fund its lending.

IPF, which was spun out of Bradford-based Provident Financial, lends small sums to householders in emerging markets such as Poland, Hungary and Mexico.

IPF said the programme was arranged by Citigroup and has been rated BB+ by ratings agency Fitch. The notes will be issued in tranches, paying an as-yet unspecified coupon.

With available bank facilities shrinking markedly, IPF has been keen to diversify its funding. Some 160m of bank debt expired in March, leaving it with 386m of debt facilities in place until October 2011. It aims to extend these facilities to 2013.

The group recently said borrowings at the end of March were 339m, with "sufficient committed bank facilities to fund existing operations through to October 2011".

In recent months improving economic conditions and cost controls have helped IPF offset weak collections seen in the first two months of the year when heavy snow hit profits.

Provident Financial last year launched a 250m 10-year bond, which helped reduce its reliance on bank finance. Last month it also launched a 75m ten-year bond, specifically targeted at the private investor.