Lancashire CCC Launch First Ever ‘Cricket Bond’
By iSportconnect | September 24, 2014
Lancashire County Cricket Club, owners of Test Match ground Old Trafford, today launched the second ever retail bond in British sport – the ‘Cricket Bond’.
The aim of the ‘Cricket Bond’ is to seek to raise £3 million towards the development of a four-star hotel at the Manchester venue.
Daniel Gidney, the chief executive of Lancashire County Cricket Club, said: “Our vision is to provide one of the best sports, entertainment and business experiences in world cricket. An attractive, contemporary hotel that will appeal to corporate visitors and private customers alike is central to this aim.”
This move follows the successful issue of the first unlisted retail or ‘mini’ bond in British sport last year by The Jockey Club.
The Jockey Club ‘Racecourse Bond’ raised almost £25 million towards the development of a state-of-the-art new grandstand, public walkways and multi-tiered parade ring viewing at Cheltenham Racecourse.
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.
Commenting on the Lancashire CCC retail bond offer, Paul Fisher, Group Managing Director of Jockey Club Racecourses, said:
“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, Fisher added: “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.”