London Stock Exchange Group (LON: LSEG) has mandated five banks for a benchmark three-year sterling bond that UK retail investors could buy in £1,000 units. A deal may follow, subject to market conditions.
Barclays, HSBC, Lloyds Bank Corporate Markets, NatWest and RBC Capital Markets are the joint lead managers, with Lloyds acting as co-ordinator for the bond format. LSEG is rated A (stable) by S&P and A3 (positive) by Moody’s.
The notes would be fixed rate and senior unsecured, issued by LSEG Finance plc and guaranteed by LSEG plc under its £10bn Euro Medium Term Note programme.
The structure is aimed at private investors. The notes are designed to qualify as a Plain Vanilla Listed Bond, with a minimum denomination of £1,000, and the retail offer depends on admission to the London Stock Exchange’s Main Market.
Winterflood, a division of Marex Financial, and RetailBook gather orders from UK retail intermediaries. Each may be allocated some, all or none of the notes it asks for, at the discretion of the issuer and LSEG plc. Individual investors should go through their usual broker.
LSEG has already moved some existing debt to this format. On the 16th of April it said holders of three sterling bonds, about £1.4bn in total, had consented to cut minimum denominations to £1,000, qualify as Plain Vanilla Listed Bonds and allow holdings through CREST.
Their yields to maturity, the annualised return from buying at the current price and holding to maturity assuming all payments are made, were 5.21% on the 4.500% 2028 bond, 5.14% on the 1.625% 2030 bond and 5.61% on the 4.875% 2032 bond at Friday’s close.
Those mid prices were £98.60, £89.075 and £96.025 per £100 of face value. LSEG says they are not a reliable guide to future prices or yields, nor to the terms of the new notes.
Those terms are still open. The interest rate, issue price and yield will be set after a syndicated bookbuild, and initial pricing and the book opening will be announced in due course.
The notes are not covered by the Financial Services Compensation Scheme, and investors could lose some or all of their money if the issuer or LSEG plc became insolvent. The Financial Conduct Authority approved the offering circular, but said that is not an endorsement of the notes.