Tesco launch second issue of inflation-linked savings bond
Thursday, 01 December 2011 01:51
Tesco Bank has launched a second issue of its inflation-linked corporate savings bond.
The Tesco Bank Retail Price Index (RPI) Bond will pay coupon of one per cent twice annually in June and December which will be flexible to take account of changes to the RPI measure of inflation.
The capital value of the investment will also be amended in line with RPI which means that at the end of the eight-year term savers will receive the capital amount of the bond and increases in RPI over the period. RPI measured 5.4 per cent in October but is expected to fall during 2012.
However, Tesco has issued a commitment that all investors will receive no less than full face value of their investment if RPI drops dramatically.
The bond has a minimum investment of £2,000 and can only be bought through wealth managers and stockbrokers and can be held through an ISA or a Sipp.
Benny Higgins, Chief Executive of Tesco Bank commented: “Our first retail bond was very successful, exceeding all expectations. It attracted interest from a broad customer base and there was unfulfilled demand when the book was closed. The issue of our second bond, in an inflation-linked format, offers a further opportunity to investors.”
Potential investors need to move quickly as the last inflation-linked bond proved very popular. This second issue is available until 10am on December 9th and the bonds will begin trading on the stock market on the 16th December.
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