The Jockey Club, owner of 15 leading racecourses including Cheltenham, Aintree, Epsom Downs and Newmarket as the largest commercial group in British horseracing, today announced it has received £24.7 million (£24,743,500) of applications for its Racecourse Bond, exceeding the company's expectations and its original target of £15 million.
The result means the first retail bond in British sport will be the second largest unlisted UK retail bond issue ever. The funds raised will go towards the funding of The Jockey Club's planned £45 million Cheltenham Racecourse development.
The Racecourse Bond is a five-year fixed-term investment paying a total of 7.75% gross interest per year, split between 4.75% cash and 3% in racing rewards in the form of Rewards4Racing points from The Jockey Club’s loyalty scheme, which can be redeemed for items including tickets, food, drink, hospitality and annual memberships at all 15 of the Group’s racecourses. Bondholders will receive interest payments quarterly in arrears.
On Thursday 16th May 2013, the Racecourse Bond passed its £15 million target. As a highly-efficient method of raising funds and with continued demand after no slowdown in the rate of applications, The Jockey Club decided to extend the offer by ten days beyond the original Friday 17th May 2013 deadline until Tuesday 28th May 2013. A minimum of £5 million needed to be raised to issue the bond at all.
Paul Fisher, Group Managing Director of Jockey Club Racecourses, said:
"We conducted in-depth research before we launched the first retail bond in British sport and that gave us confidence our offer of generous cash returns and racing rewards would go down well. We were expecting to raise around £15 million, so to have exceeded that by almost £10 million is an achievement we're hugely proud of.
"It's a great sign of trust in the strength of our 263-year-old brand and the modern, commercial approach we take today, as well as further indication that horseracing is a sport on the up. I believe having a clear reason for raising these funds has helped, because while guaranteeing investors healthy fixed-rate returns has been vital, people know their investment is also supporting British racing through our planned development at Cheltenham.
"As we said when extending the offer, it was made clear to us demand was out there and I'm delighted that has proved to be the case. I look forward to repaying the faith shown by investors over the next five years in their capacity as Jockey Club Racecourse Bondholders. More than 93% of applications were for the blended cash and Rewards4Racing offer, so we will be welcoming around 2,000 people to use their points at our racecourses."
Simon Bazalgette, Group Chief Executive of The Jockey Club and Chairman of Jockey Club Racecourses, said:
"We’re delighted with the outcome, which is great news for British racing. The Jockey Club is an organisation always looking forward and the same can be said of our sport, as we seek to secure a bright future. The success of the Racecourse Bond is another step on that journey, with the funds we have raised supporting our iconic planned development at Cheltenham Racecourse, which aims to enhance the experience we offer to racing fans and shine even more focus on the world’s best Jumps horses."
Ian Renton, Cheltenham and South West Regional Director of Jockey Club Racecourses, said:
"It is simply fantastic to have raised more than half of the capital towards The Jockey Club's planned development at the home of Jump racing just through the Racecourse Bond. We submitted a detailed planning application on time at the end of April and hope to receive a decision on the project from the local authorities in the summer. If successful, we plan to break ground following the end of the 2014 Cheltenham Festival for a 22-month build period. These are incredibly exciting times for Cheltenham and we can't wait to offer an enhanced experience for our customers."
Following the 2013 Cheltenham Festival, which attracted attendances of 235,000 over four days in March, The Jockey Club unveiled its vision for an iconic £45 million development at its flagship Cheltenham Racecourse, which is subject to planning permission. In addition to the capital raised through the first retail bond in British sport, The Jockey Club plans to fund the proposed development project using a range of commercially-sound methods, including cashflow, debentures, bank financing and other commercial arrangements.
The Jockey Club continues to play an important role at the centre of major events and initiatives in British racing. In recent times, it has helped to: secure a single terrestrial TV partner for the sport in Channel 4, under more favourable terms for racing; create and stage QIPCO British Champions Series sponsored by Qatari firm QIPCO, including the new end-of-season finale, QIPCO British Champions Day, which in 2011 and 2012 was the highest-rated raceday in the world; negotiate a five-year commercial funding agreement with Betfair in lieu of voluntary Levy payments, which is worth a minimum of £40 million to British racing; agree a ten-year renewal for headline sponsorship of The Derby with Investec; and establish the sport's first formalised loyalty programme, Rewards4Racing, which now has more than 250,000 members.
As part of its mission to act for the good of British racing in all that it does, The Jockey Club has distributed more than £350 million in prize money in the last ten years and over the same period invested more than £155 million in state-of-the-art facilities. Its vision is for British racing to be the best in the world for the next 50 years and far beyond.