Rugby bond offers 5.5 per cent interest

Harlequins has become the latest sports club hoping to tempt income-hungry savers, with a new mini-bond paying 5.5 per cent. The bond, which matures in five years' time, will pay interest twice a year.

Harlequins is aiming to raise £7.5 million, but may up this target to £15 million, depending on demand.

The money raised will be put towards 'building new audiences at home and abroad'. David Ellis, chief executive of Harlequin FC, says: 'The proceeds will enable us to invest in the club, take us to new levels and to continue to stay ahead of the game as it grows. Our goal is to be the best rugby club in Europe and the best sports club in the world.

'The focus for the club is to continue to invest in the areas that positively impact the business including our players, supporters and partners with the aim of underpinning our sporting achievements with commercial success to lay the foundation for the next 150 years.'

BOND DIFFERENCES

The bond launch follows on from rival club Wasps, who last year launched a retail bond, paying 6.5 per cent interest. But it is worth bearing in mind there are differences between the two bond types.

The mini-bond offered by Harlequins cannot be traded, therefore the bond must be held until maturity.

Retail bonds, in contrast, are listed on the London Stock Exchange on a market called the Order Book for Retail Bonds.

Neither retail nor mini-bonds are covered by the Financial Services Compensation Scheme.

When weighing up whether to put money into a mini-bond, investors are essentially taking a view on whether the issuer will grow as hoped, in order to pay the interest payments. In a worst case scenario - the issuer failing - investors face the prospect of losing all of their capital.

The minimum investment is £2,000, with the offer period closing on 16 May. The mini-bond will prioritise season ticket holders and club members until 3 May.

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