Builders merchants Grafton Group has launched a retail bond, offering investors an annual return of 5.5% over seven years.
It aims to raise £50 million through the issue of a sterling denominated retail bond offering 5.5% over seven years, with the bonds due to mature in 2020. Interest payments will be payable on 15 January and 15 July each year.The bond will be issued by a wholly-owned subsidiary called Grafton Group Finance but guaranteed by the wider group.
The minimum investment is £2,000 and the bond will be available for purchase until next Monday (8 July). It is expected to be listed on the London Stock Exchange’s Order Book of Retail Bonds.
Chief executive Gavin Slark said that the bond was part of Grafton’s strategy of diversifying its sources of funding and extending the maturity profile of its debt.
Last year Grafton Group more than trebled pre-tax profits to €33.5 million (£28.4 million) and increased dividends to its shareholders by 13% to 8.5 cents a share.
Grafton Group owns builders merchants brands Buildbase, Plumbase, Selco and Jacksons Building Centres as well as Hendricks Lovell and MacNaughton Blair, among others.
In its retail bond brochure the company said it was ‘well placed to benefit from a recovery in markets from current cyclical lows’.