For some a while I have been investing in retail bonds. With yields in saving accounts being so poor these are an alternative. There is risk involved as they are a non-protected product and some of the companies issuing, although themselves listed, carry risk.
If you invest at inception not only do you get good yields but also the potential for a capital gain as generally they list on the LSE at a higher price when the initial offer closes. A good example is the Tesco 5% Bond which listed at 100p but is now priced at 103.5/104.45
A number of bonds with a duration of seven to eight years are starting to look good value. The Unite 6.125 per cent is now trading at par, along with the St Modwen 6.25 per cent, both with 2020 redemption dates. The Primary Health Properties 5.375 per is at 97p, giving a running yield of more than 5.5 per cent. Overall, with minimal risk from rising interest rates, this looks like solid income at good value.
Bruntwood Investments, a family-owned property business, has announced the launch of a retail bond with a 6 per cent coupon, secured against its property portfolio.
www.londonstockexchange.com/prices-and-markets/retail-bonds/newrecent/bruntwood-2020.htm
Clever clogs! Seymour gave me instructions but I'm obviously not doing something correctly. I'll hope for better luck next time.
Have you read the Bruntwood prospectus? I'm not exactly a whizz with balance sheets but it all seems to be a little on a knife edge. And being a family firm, when the chips are down the family will always come first. I think I'll give it a miss.