Charity raises £33m investment in one week
Greensleeves Care has raised £33m in less than a week through a retail charity bond.
The charity provides nursing and dementia care for elderly people. It currently supports 789 residents in 20 care homes across England.
It is the largest retail charity bond with the lowest interest rate to date. It pays an interest rate of 4.25% a year for a term of nine years. When issued, it saw a strong demand from a range of institutional and individual investors, according to Allia, which oversees the bond. The charity was originally hoping to raise a sum of £20m-£30m.
The bond opened on 7th March and closed just a week later, on 14th March.
Paul Newman, chief executive of Greensleeves Care, said: “We are delighted that we have been part of the largest ever retail charity bond issue.
“The money will be put to immediate use to buy and develop new homes and sites as we invest in our portfolio and our ability to increase the number of older people who benefit from our award-winning care.”
The money will also be used to pay off all existing debt.
A total of £50m bonds have been created for Greensleeves Care, so that charity has the option to raise up to a further £17m by selling more bonds in the future.
The bond is issued through Allia’s Retail Charity Bond platform, which was launched in 2014. The bonds are listed on the London Stock Exchange and investors can buy or sell their bonds at any time. The lead manager for this bond issue was Peel Hunt LLP.
Pioneers Post first wrote about the platform a couple of years ago. Since it began, £91m has been raised following previous issues for Golden Lane Housing (£11m), Hightown Housing Association (£27m) and the Charities Aid Foundation (£20m).
Bonds are essentially IOUs – an investor loans the money to an organisation in exchange for a predetermined interest rate. Unlike other types of investment, the money is not secured against an asset and the money does not need to be paid back until the end of the agreed term.
Tim Jones, chief executive of Allia, said: “The success of this latest retail charity bond reinforces the strength of demand for impact investment opportunities through mainstream financial products.”
He added that this has “proven the viability of this funding route for other charities in the care sector”.