The Jockey Club today declared the first sporting retail bond a winner after netting a near-£25 million haul from investors.
Proceeds from the bond, aimed at racegoers, will part-fund the £45 million redevelopment of one of its flagship tracks, Cheltenham. The Jockey Club, which had originally aimed to raise at least £15 million, said 2100 punters had backed the bond, with an average stake of £11,783.
The bond pays 4.75 per cent gross plus a further 3 per cent in “rewards” such as tickets and hospitality. It said 6.9 per cent of investors waived that part of the offer “for tax reasons”. The bond offer was originally due to close on May 17 but was extended due to demand. It had raised almost £18.6 million by the original deadline, and added nearly £6.2 million during the extension.
Retail bonds have become a popular way for companies to raise cash, and the London Stock Exchange offers a trading facility. However, the Jockey Club bond is not listed, and is the second-largest such unlisted security. Paul Fisher, managing director of Jockey Club Racecourses, said: “I believe having a clear reason for raising these funds has helped, because, while guaranteeing investors healthy fixed-rate returns has been vital, people know their investment is also supporting British racing through our planned development at Cheltenham.”
The Club also owns Epsom, Newmarket, Aintree and a string of other courses. Epsom’s two-day Derby meeting gets under way tomorrow.
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