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Grafton Group launches retail bonds

Grafton Group, the building merchant that also owns Woodies DIY, has launched its first ever listed retail bond as it seeks to extend its debt maturity and diversify its sources of funding.

The company unveiled a sterling bond due to mature in 2020 which carries a coupon, or interest rate, of 5.5pc per annum.

The company said the minimum initial investment is £2,000 (€2,353) and the bonds could be bought and sold at their face value of £1,000 plus increments of £100 in excess of £1,000 thereafter.

The bonds went on sale yesterday (June 24) and the book will close at noon on July 8. They'll be listed on the London Stock Exchange. The total amount of bonds issued by the company will depend on demand and there's no minimum amount that the company is hoping to sell. Industry sources suggest the group could realise anything up to €50m in fresh funding

"The group is pleased to launch its first listed retail bond as part of its strategy of diversifying its sources of funding and extending the maturity profile of its debt," said Grafton chief executive Gavin Slark.

At the end of 2012, Grafton had gearing of 20pc and net debt refinanced out to 2016. Its net debt at the end of 2012 stood at €202m.

Grafton generated turnover of €2.17bn in 2012 and made a €75.2m profit. About three-quarters of its revenue and profits are generated in the UK.

Source : John Mulligan - Irish Independent

26 June 2013
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