The Charities Aid Foundation (CAF) Retail Charity Bond has closed early after just one week, having raised £20 million. The offer saw strong demand from both institutional and retail investors and closed over-subscribed.
CAF Retail Charity Bond raises £20m
The bond is the third to be issued through the Retail Charity Bonds platform, created by Allia to enable charities to raise loan finance from mainstream investors through bonds listed on London Stock Exchange. The platform has now raised a total of £68 million for CAF, Golden Lane Housing and Hightown Housing Association.
The CAF Bond will pay investors 5% a year over a term of 10 years. The benefit of being listed is that investors will be able to buy and sell bonds at any time during that period on London Stock Exchange’s Order book for Retail Bonds.
Dr John Low, Chief Executive of Charities Aid Foundation, said: “We are delighted at the reception to the Charities Aid Foundation Retail Charity Bond and its early closure. The proceeds of the Bond will be used to further our work, enhancing CAF’s services for donors and the thousands of charities we work with.”
Tim Jones, CEO of Allia commented: “The success of this latest offer demonstrates the ability of Retail Charity Bonds platform to allow established UK charities like CAF to access a new source of funding. We created Retail Charity Bonds to help charities deliver their social mission, and this bond for CAF will result in widespread benefit across the charity sector. Allia will continue to work with more charitable organisations and connect them with investors seeking financial return with social benefits.”
Adrian Bell, Head of Debt Markets UK, Canaccord Genuity, added: “This is the third Retail Charity Bond to be launched and the third to close early. The success achieved by all three demonstrates the strength of demand from investors for these fixed income social investment opportunities that support UK charities. Investors are able to benefit from a transparent and liquid market that offers a financial return and creates tangible social benefit.”
CAF helps people and companies support the causes they care about and provides financial services for the charity sector. It provides a range of services for individual and company donors, including charity accounts, charitable trusts, and legacy services, company accounts and payroll giving. It also provides fundraising support services for charities, social investment and financial services for the not-for-profit sector, including investments and a range of banking and loans through CAF Bank.
Allia is a not-for-profit organisation that supports businesses - through flexible workspace, social finance and free business support - so that they can grow and create positive impact, on their communities and on the planet.