New Inflation Multiplier bond on retail bond market

The London Stock Exchange’s Order book for Retail Bonds (ORB) this week welcomes a new retail bond from Royal Bank of Scotland (RBS). The bond is the first multiplier bond to be made available on ORB and is designed to help investors benefit from rising UK inflation.

The RBS Inflation Multiplier bond, tradable in denominations of £100, has a quarterly coupon equivalent to 1.3 times the rise in the UK Retail Price Index (UK RPI). If UK inflation falls or remains flat, no coupon payment is made for that period.

Pietro Poletto, Head of Fixed Income Markets at London Stock Exchange Group, said:

“We are delighted to welcome this new bond, issued specifically for trading on our ORB platform. By allowing investors to benefit during periods of high inflation, it further diversifies the range of products which can easily be bought and sold on our new retail bond market.”

The new bond is the latest in a series of recent retail-sized issues by RBS which are based on UK RPI and LIBOR rates. It matures in December 2020.

The ORB was launched in February 2010 in response to strong private investor demand for greater access to fixed income. It now offers trading in 142 corporate, government and supranational bonds, all of which are exempt from stamp duty.