Property group Places for People has launched a 10-year inflation-linked corporate bond, following its first successful listing last May.

The bond will pay an annual coupon of 1 per cent adjusted to take into account changes in the Retail Prices Index (RPI). The inflation-adjusted coupon value will be calculated using the RPI value eight months before each interest payment is due, and interest will be paid twice a year.

The capital value of the bond will also be uprated in line with the RPI, which had a reading of 5.2 per cent in November. This means that at the end of the 10-year term, investors will get back the capital value of the bond plus any increases in RPI over the 10 years.

If the RPI has fallen on the maturity date, Places for People will pay back the bonds at their face value.

The bond has a minimum investment of £2,000, and can be bought in multiples of £100 thereafter through stockbrokers and wealth managers.

The offer period for the bonds will close on 25 January, or earlier if demand is high. They will begin trading on the London Stock Exchange’s Order Book for Retail Bonds (ORB) on 31 January.

Phil Wong, stockbroker at Redmayne Bentley, a distributor of the bond, comments: 'Over the last few months, we’ve seen an appetite for index linked bonds following the success of the recent National Grid and Tesco Bank RPI issues in the last quarter of 2011 and we anticipate the Places for People bond will also attract interest.'
 
He adds: 'With the Bank of England leaving the interest rate figure at a record low 0.5 per cent for the 35th consecutive month and inflation running well ahead of the target rate of two per cent, investors will be looking for an investment that provides a yield in real terms.'

Last May, Places for People launched a fixed-rate bond with a coupon value of 5 per cent, raising £140 million.

Places for People is a UK property management, development and regeneration group, made up of 13 companies including four housing associations.