Tesco Bank Retail Bond smashes expectations

Tesco Bank has closed its first retail bond, raising £125 million, with demand from thousands of investors smashing expectations. This is the highest amount raised by a pure retail bond since the launch of the Order Book for Retail Bonds (ORB) by the London Stock Exchange in February 2010.

The Tesco Bank 5.2% Retail Bond was issued as part of Tesco Bank's strategy to diversify its funding base ahead of a planned move into the mortgage market this summer.

Benny Higgins, Chief Executive of Tesco Bank commented: "Our first retail bond has been a huge success, attracting interest from a broad customer base as demand widely surpassed our expectations. As we look to diversify our sources of funding, the appetite for our first bond has given us renewed confidence in the retail bond market."

The bond will pay a fixed rate of interest of 5.2% Gross per annum for its term, until August 2018. Investors can sell the bond before maturity on the open market through their stockbroker and prices will be available on the London Stock Exchange's ORB.