Tesco Bank has withdrawn its second Retail Bond after receiving deposits worth £60 million.
The eight-year inflation-linked bond, which was only available through stockbrokers and wealth managers – and was aimed at investors looking for inflation protection, managed to raise £60 million in just 10 days, despite challenging economic conditions.
It will be issued by Tesco Bank on 16 December 2011
Benny Higgins, chief executive of Tesco Bank, said: “We are delighted by the excellent response by investors to what will be the second issue of Tesco Bank Retail Bonds which once again exceeded our target.”
“Although we are principally funded by retail deposits, the success of our second Retail Bond, which once again exceeded our target, shows the keen interest of a broad customer base in both Tesco Bank and in the range of savings and investments that we offer.”
Over the eight-year term of the savings product, investors will receive interest twice a year starting at a 1 per cent annual gross rate of interest and rising with RPI. On maturity, Tesco Bank will pay back the full amount invested in the bonds plus any overall increase in the RPI.
If inflation has fallen during the term, it will repay the bonds at their full face value.
