London Stock Exchange's Order Book for Retail Bonds (ORB) market today celebrated its second full year of operation. Launched in 2010 in response to strong private investor demand for greater access to fixed income products, ORB offers transparent two-way trading in over 150 corporate, government and supranational bonds.
To celebrate the second anniversary, ORB will today host a series of debates exploring the benefits of the retail bond market from an investor, trader and issuer perspective. Keynote speaker, MP Sam Gyimah, will open the event.
Over the last year ORB has raised over £1.2 billion through 11 dedicated new issues and four taps of existing bonds, including a record £282.5 million raised by a single National Grid bond. Other notable issues have included Places for People, one of the UK's largest housing associations, and Tesco Bank raising annual totals of £180 million and £185 million respectively.
In September 2011, ORB migrated onto London Stock Exchange's low-latency trading platform, Millennium Exchange, which offers enhanced functionality and access for brokers and market makers. Over the last 12 months, two new dedicated market makers, Barclays Capital and Peel Hunt were welcomed onto the platform, bringing extra liquidity to the secondary market.
Xavier Rolet, Chief Executive at London Stock Exchange Group said:
"We are delighted with ORB's continued strong growth in only its second full year of trading. There have been a number of key successes; over £1.2 billion has been raised, the platform migrated on to the low-latency Millennium Exchange and we have welcomed two new market makers, increasing liquidity in the secondary market. Companies are increasingly looking for new ways to raise capital and, as private investors have shown, there is strong appetite for retail sized bonds from a whole range of issuers. We look forward to continuing to drive the growth of ORB to meet this demand."
Sam Gyimah, MP for East Surrey, said:
"The London Stock Exchange's retail bond platform is an important piece of market infrastructure for the UK economy. It has proved to be a very successful avenue for companies seeking alternative sources of funding as well as offering individuals access to simple and transparent investment products. The UK government is committed to supporting the expansion of the range of financing options available to companies and ORB is a reflection of one such model."
There are currently 154 corporate, government and supranational bonds available for trading on ORB, which are available in accessible denominations typically between £1 and £1,000. All are exempt from stamp duty and those maturing in five years or more when purchased are eligible for inclusion in ISAs and SIPPs. Two-way prices are displayed continuously throughout the day and full prospectus details are available for each security. Private investors can access free educational information about bonds through a dedicated website www.londonstockexchange.com/bondsmadeeasy along with specific customisable tools for retail bonds to help them make informed investment decisions.
