ORB celebrates its seventh birthday

Since​ ​then, a number of companies have chosen to issue retail bonds via the platform, diversifying their​ ​funding strategies whilst simultaneously opening up new pools of investment capital to UK private​ ​investors.

To date almost £6​bn in capital has been raised through ORB, demonstrating that a larger and​ ​more active retail bond market has a significant role to play in allowing companies to raise capital​ ​and invest in growth, in turn supporting the ongoing recovery of the country.

Launched in response to investor demand in 2010, ORB is the UK’s first transparent, regulated​ ​electronic order book for the trading of retail denominated bonds. With denominations as small as​ ​£1, retail bonds are accessible to private investors and have opened up a new pool of capital for​ ​companies.

For private investors, retail bonds have proved particularly attractive in light of the prolonged low​ ​interest rate environment in the UK. And retail bonds benefit from being eligible for inclusion in ISAs​ ​​and SIPPS.

Currently, there are over 170 corporate bonds and UK gilts listed on ORB ranging from fixed rate, to​ ​inflation-linked and floating rate issues. Bonds include household names such as National Grid, Tesco​ ​Bank, Lloyds and London Stock Exchange Group, the latter’s bond issue being the largest retail-denominated bond to date.

Another type of retail bond that entered the market in 2014 is the charity bond. Again, we listened​ ​to demand from our customers, who wanted direct access to instruments with a socially responsible​ ​and ethical impact.

The Retail Charity Bond segment on ORB enabled for the first time UK charities to raise medium​ ​term debt finance in a transparent, regulated way.

Golden Lane Housing, a subsidiary of Mencap,​ ​was the first charity bond to be listed, raising £11​m in 2014. In March 2016, the Charities Aid​ ​Foundation, one of the largest providers of philanthropic services to charities and donors worldwide,​ ​raised £30​m on the segment.

Despite strong take-up by companies over the last seven years, we are only scratching the surface of​ ​what could be possible on ORB. For companies, small and large, the opportunity to involve their​ ​customers and employees in their funding strategy provides clear advantages in terms of​ ​engagement and participation.

In addition, the potential from initiatives such as recent UK pension reforms, encouraging greater​ ​private investor participation in the financial markets, will allow ORB to continue to strengthen and​ ​grow.

London Stock Exchange is committed to campaigning for the private investor cause, recognising the​ ​importance of this investor base in the growth of UK businesses and the wider economy.

It is critical that ordinary citizens have the opportunity to invest in and support the long term​ ​development of the businesses shaping their country.

There is still work to do, but this month’s birthday celebrations mark the great progress being made.

If you’d like to find out more about ORB, London Stock Exchange has a dedicated online resource as​ ​well as a full database of all the retail bonds available on its markets. Visit:​www.lseg.com/retailbonds