On the back of The Jockey Club raising nearly £25 million from the first retail or 'mini' bond in British sport last year, Lancashire County Cricket Club today launched the 'Cricket Bond' as it seeks to raise £3 million towards the development at its famous Old Trafford venue.
The Jockey Club Racecourse Bond raised capital towards the development of a state-of-the-art new grandstand, public walkways and multi-tiered parade ring viewing at the Home of Jumps racing, Cheltenham Racecourse. It surpassed its target by almost £10 million.
Development work at Cheltenham has been underway throughout 2014 with racing continuing as normal when the course's new season starts at the Showcase Meeting on 17th and 18th October. Various elements will open on an ongoing basis once ready on an ongoing basis before the full grandstand is completed in time for The Cheltenham Festival in March 2016.
The Cricket Bond coupon offers 7 percent interest per annum made up of 5 percent cash interest and a further 2 percent in Credit4Cricket Units. The Jockey Club's 7.75 percent interest Racecourse Bond offered 4.75 percent cash interest and 3 percent in Rewards4Racing points to redeem against tickets, upgrades, food, beverages and bespoke experiences.
Commenting on the Lancashire CCC retail bond offer, Paul Fisher, Group Managing Director of Jockey Club Racecourses
"The Cricket Bond is offering a combination of cash and rewards and has launched giving a clear rationale behind what investors’ money will go towards. That’s an approach that proved a winner for us with our Racecourse Bond last year. We know one of the most common and important questions potential investors ask themselves is 'will my money be safe', so I expect to see Lancashire CCC addressing this in their communications, emphasising this is their 150th anniversary year."
Reflecting The Jockey Club Racecourse Bond, Paul Fisher said:
"With our Racecourse Bond, primarily we were delighted to secure the financing for an important development at Cheltenham, but we were also really proud that people put their trust in us and our brand, and it was a great platform for The Jockey Club to resonate with a wider audience.
"Our offer last year was timely with the high street offering so little to savers but, provided the market conditions were right, we would consider another bond issue further down the line if we were looking to raise investment capital in the future; it's been such a success for us.
"It's taken our relationship with the people who became Bondholders to a whole new level. Some were existing racing customers of ours while others are completely new. They were interested in getting excellent returns from a financially sound organisation they trust, who also gave them the opportunity to support Cheltenham, The Jockey Club and British racing in the process with an exciting and sustainable use for the funds."
With regards to anything The Jockey Club would have done differently, he added:
"We capped the maximum investment at £100,000 because we didn't want people to put in sums that might make them feel they were buying part of the company rather than investing in a product. Looking back I think we could have safely doubled the maximum without venturing into that territory and we had private individuals contacting us to see if they could make £500,000 investments we had to turn down."
Management information on The Jockey Club 'Racecourse Bond':
- Coupon: 4.75% cash plus 3% equivalent in racing rewards (both paid quarterly)
- Term: five years
- Investment parameters: £2,000-£100,000
- Status: unlisted, non-tradeable
- Date offered: 24th April to 30th May 2013 (after extension on 17th May due to demand)
- Amount raised: £24,743,500
- Target: £15,000,000
- Bondholders: 2,100
- Average investment: £11,783
- Most common investments: 1) £10,000, 2) £5,000 and 3) £2,000
- Number of £100,000 investors: 61 (raising £6.1 million)