Welcome to ORB. London Stock Exchange s Order book for Retail Bonds

Transcription

1 Welcome to ORB s Order book for Retail Bonds

2 Driven by investor demand Increasing private investor focus on fixed income Bond funds saw record inflows in 2009 and 2010 Strong demand from UK private client brokers for easier access to bonds Private investors keen to take more active role in managing their portfolio and reduce transaction costs Page 2

3 Meeting corporates funding needs Challenging funding environment, with regulation driving banks to limit provision of credit or to concentrate lending to largest companies only UK companies seeking to diversify their funding strategies, to reduce risks and decrease overall costs Innovative financing tools are key to create an efficient capital structure Source: European Central Bank Page 3

4 Launch of ORB In February 2010, launched its new electronic bond market for retail investors the Order book for Retail Bonds (ORB) building upon its existing experience of managing electronic fixed income markets Key aims of ORB are to develop both an efficient, transparent secondary market in bonds for UK investors and to establish a primary market for distribution of dedicated retail bonds opening up new sources of capital for companies seeking to diversify their funding Page 4

5 A new funding tool for corporates ORB has now established itself as an alternative source of funds for a wide range of corporates looking to raise debt capital through capital markets A guide for issuers interested in issuing bonds on ORB is available on s website: londonstockexchange.com/orbguide ORB is suitable for businesses of all sizes and across all sectors, helping them tap into a new pool of capital outside of the traditional wholesale markets. We have seen a wide range of companies issue bonds on the platform, from large household names such as National Grid through to midcap companies such as Workspace Group, a provider of office space for small and medium-sized companies Xavier Rolet, CEO of Group Page 5

6 Bonds available on ORB ORB currently has more than 180 retail-size bonds on the platform offering a range of gilts, corporate and supranational bonds Over 110 corporate and four supranational bonds. At launch, a number of existing retail-size bonds were made available for continuous quoting on the electronic order book, and more have been added in the last three years Also offers range of 70 gilts, including both conventional gilts, inflationlinked gilts and some of the most popular undated issues All the corporate and government bonds available for trading on ORB are stamp duty -exempt and eligible for ISA inclusion Page 6

7 ORB dedicated issues 50 ORB-dedicated new issues and 6 taps of existing ORB issues have raised more than 4.75 billion since launch 28 different issuers have successfully tapped the retail bond investor community, including: Burford Capital, National Grid, Premier Oil, Ladbrokes, Tesco Bank, Tullett Prebon, Unite Group, Provident Financial Widening investor base - increasingly strong demand for retail bonds from retail brokers, wealth managers and private investors Page 7

8 A Flexible market for issuers Alternative source of funding - issuing retail bonds onto ORB, issuers are able to tap into a new source of funding and diversify into a new pool of retail liquidity. A retail bond can either be an alternative source of funding or complement existing channels Flexibility - ORB offers greater flexibility for issuers as the size of a retail bond can be tailored to meet issuers particular needs; issue sizes on the ORB have ranged from 20 million to 300million Structure - Retail bonds have been characterised by simple structures, however we have seen fixed, floating and index linked bonds issued onto the market Page 8

9 a transparent platform for investors Transparency the high level of transparency offered by the Order book for Retail Bonds is a key benefit for investors: thanks to the commitment of ORB dedicated market makers, investors can see continuous tradable prices on-screen and easily monitor the value of their bond portfolio bond documentation for all the securities on ORB is available on the London Stock Exchange s website Regulatory supervision ORB is a EU regulated market monitored and supervised by the s Market Supervision Team throughout the trading day Strong secondary market liquidity on-book liquidity growing fast as a consequence of tightening average spreads Page 9

10 Electronic order book New market model introduced by London Stock Exchange when ORB was launched means investors are able to see prices onscreen and trade in bonds in a similar way as they have always done with shares Source: Proquote Page 10

11 Millions Born on ORB trading volumes Value traded and number of trades for all ORB dedicated issues Value traded - left axis Number of trades - right axis Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 7,500 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Source: Page 11

12 Market partners ORB is currently supported by ten market makers: Investec Bank, Lloyds TSB Bank and Winterflood Securities in gilts and corporates Canaccord Genuity, Peel Hunt and Shore Capital across corporate bond range Jefferies International in gilts HSBC, BNP Paribas and Numis Securities in a range of corporates We continue to work with market partners supporting them with PR and marketing activity to further develop ORB Dedicated partner logos may be displayed by participants Page 12

13 Profile Page 13

14 Order book for Retail Bonds ORB dedicated issues - (1) ISIN Issuer Name Date Listed Maturity (year) Coupon Value Coupon Type Minimum Denomination Issue Size XS Wasps Finance plc 06/05/ F million XS Retail Charity Bonds plc (Hightown) 01/05/ F million XS Provident Financial plc 14/04/ F million XS Intermediate Capital Group plc 24/03/ F million XS Eros International Plc 16/10/ F million XS A2D Funding II Plc 01/10/ F million XS Burford Capital plc 20/08/ F million XS Retail Charity Bonds plc (MCAP) 30/07/ F million XS Ladbrokes Group Finance plc 17/06/ F million XS The Paragon Group of Companies PLC 30/01/ F million XS Premier Oil plc 11/12/ F million XS A2D Funding Plc 21/10/ F million XS Bruntwood Investments plc 25/07/ F million XS Helical Bar plc 25/06/ F million XS International Personal Finance plc 08/05/ F million XS Provident Financial plc 27/03/ F million XS The Paragon Group of Companies PLC 03/03/ F million

15 Order book for Retail Bonds ORB dedicated issues - (2) ISIN Issuer Name Date Listed Maturity (year) Coupon Value Coupon Type Minimum Denomination Issue Size XS EnQuest PLC 15/02/ F million XS Alpha Plus Holdings plc 19/12/ F million XS UNITE Group plc 12/12/ F million XS Tullett Prebon plc 11/12/ F million XS St. Modwen Properties plc 07/11/ F million XS Group plc 05/11/ F million XS Workspace Group plc 10/10/ F million XS Beazley plc 25/09/ F million XS Intermediate Capital Group plc 20/09/ F million XS CLS Holdings plc 12/09/ F million XS ICAP plc 31/07/ F million XS Primary Health Properties plc 24/07/ F million XS Severn Trent plc 11/07/ (IL) IL million XS Tesco Personal Finance plc 21/05/ F million XS Provident Financial plc 04/04/ F million XS Places For People Capital Markets 31/01/ (IL) IL million XS Intermediate Capital Group plc 22/12/ F million

16 Order book for Retail Bonds ORB dedicated issues - (3) ISIN Issuer Name Date Listed Maturity (year) Coupon Value Coupon Type Minimum Denomination Issue Size XS Tesco Personal Finance plc 16/12/ (IL) IL million GB00B3YYW134 Royal Bank of Scotland 07/11/ (V) Variable million XS National Grid plc 30/09/ (IL) IL million XS Places For People Capital Markets 27/06/ F million XS Provident Financial plc 31/03/ F million XS Lloyds TSB Bank plc 25/03/ F million XS European Investment Bank 11/03/ F million XS Tesco Personal Finance plc 25/02/ year 5.20 F million GB00B42SH312 Royal Bank of Scotland 21/02/ year 2.00 (V) Variable million GB00B442CZ84 Royal Bank of Scotland 17/01/ year 3.30 F million GB00B4MTS317 2 Royal Bank of Scotland 06/12/ year 0.00 (V) Variable million GB00B4RM3T66 Royal Bank Of Scotland plc 01/11/ year 3.90 (V) Variable million GB00B4P95L57 1 Royal Bank Of Scotland plc 01/11/ year 3.90 (V) Variable million XS Lloyds TSB Bank plc 21/06/ year F million XS Provident Financial plc 15/04/ year 7.0 F million GB00B3N3WC23 Royal Bank of Scotland 01/02/ year 5.10 F million

17 Case study (1) Alpha Plus Holdings plc Issuer Sector Shares listed Alpha Plus Holdings plc Education No Issue date 19 December 2012 Issue size Coupon Maturity Status Lead Manager Authorised Distributors 48.5 million 5.75% Fixed 7 year Secured over a portfolio of assets Canaccord Genuity Collins Stewart, Interactive Investor, Peel Hunt, RM Capital Markets, Selftrade, Shore Capital, Smith and Williamson Page 17

18 Case study (2) Burford Capital plc Issuer Sector Shares listed Burford Capital plc Equity Investment Instruments No AIM quoted Issue date 20 August 2014 Issue size Coupon Maturity Status Lead Managers Authorised Distributors 90 million 6.5% Fixed 8 year Senior, Unsecured Canaccord Genuity Barclays Stockbrokers, Canaccord Genuity Wealth, Interactive Investor, Redmayne Bentley, Selftrade, Smith & Williamson Page 18

19 Case study (3) Premier Oil plc Issuer Sector Premier Oil PLC Oil & Gas Shares listed Yes - FTSE 250 Issue date 11 December 2013 Issue size Coupon Maturity Status Lead Managers Authorised Distributors 150 million 5.0% Fixed 7 year Senior, Unsecured Barclays Bank, Canaccord Genuity, Lloyds Bank Barclays Stockbrokers, Brown Shipley, Canaccord Genuity Wealth, Killik & Co, Redmayne-Bentley, Selftrade, Smith & Williamson Page 19

20 Contact us Alessandro Chiozzi Order book for Retail Bonds Mail: Tel: +44 (0) Lillian Georgopoulou Order book for Retail Bonds Mail: Tel: +44 (0)