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SBD Global/May 31, 2013/Finance

Jockey Club Raises $38M In Bond Auction, Marking Second-Largest U.K. Retail Bond

The owner of England's Aintree and Cheltenham racecourses "became the latest company to tap its customers for funding with a retail bond issue that pays punters a yield in both cash and a discount on a day out at the races," according to Duncan Robinson of the FINANCIAL TIMES. The Jockey Club, which runs 15 racecourses across the U.K., raised just less than £25M ($38M) in the retail bond auction, making it "the second largest unlisted retail bond issue" in the U.K. after retailer John Lewis in '11. While the Jockey Club’s bond offer had a cash coupon of 4.75%, the remaining 3% is "returned via loyalty points that can be used for money off tickets, food and drink at the Jockey Club’s racecourses." Racecourse group Managing Dir Paul Fisher said, “It’s a win-win” (FT, 5/30).

MAKING HISTORY: The BBC reported it was the first time "such a bond had been offered in British sport." Such was the interest that the original closing deadline was extended by 10 days "to allow further applications." The Jockey Club said the sum raised was "a great sign of trust in the strength of our 263-year-old brand" (BBC, 5/30). In London, James Moore noted the bond raised almost £18.6M ($28.2M) "by the original deadline," and added nearly £6.2M ($9.4M) "during the extension" (INDEPENDENT, 5/30). THIS IS MONEY's Lee Boyce reported there were 2,100 applicants with the average investment sitting at £11,783 ($18,000). The most popular investment amounts were £10,000 ($15,200), then £5,000 ($7,600) and £2,000 ($3,000) -- while 61 applications "were made for the maximum" £100,000 ($152,000) of Racecourse Bonds. According to statistics, 93% of the applicants chose the 7.75% gross interest blended offer, while 7% opted for a 4.75% gross interest cash-only offer (THIS IS MONEY, 5/30).
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