Strong response to National Grid's retail bond issue

30th Sep 2011 09:03

Power grid operator National Grid's campaign to almost single-handedly revive the corporate bond retail market passed another milestone as it announced the closure of the offer period for its inflation-linked sterling bond issue.The company said the final size of the bond issue is £260m. The 10-year bond will pay interest semi-annually at a 1.25% annual gross rate of interest, adjusted to take account of changes in the level of the UK Retail Prices Index (RPI).Malcolm Cooper, Global Tax and Treasury Director at National Grid, said response to the issue had "clearly exceeded our expectations. "This show that there is demand for inflation linked products from a business such as National Grid," Cooper claimed.National Grid is the first company to issue an RPI linked bond available to retail investors and listed on the LSE's Order Book for Retail Bonds (ORB). Large corporations such as National Grid usually sell their bonds to financial institutions, though it was not always the case, and the London Stock Exchange has been attempting to revive the retail side of the corporate bond market through its ORB. The National Grid issue represents the largest amount raised to date in an ORB transaction.--jh