RBS Launches New Bonds on London Stock Exchange’s Retail Bond Market

2 November 2010

The London Stock Exchange today welcomes the launch of two new corporate bonds to its Order book for Retail Bonds (ORB), issued by the Royal Bank of Scotland (RBS). Launched in February this year ORB offers private investors simple, transparent access to investment in individual fixed income securities.

RBS has today listed an Inflation Linked Bond and a Floating Rate Bond; each instrument will offer a minimum return of 3.9 per cent with the quarterly coupon rising with inflation or interest rates accordingly.

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

“We are delighted to welcome two new RBS bonds on to our Order book for Retail Bonds today. The ORB market gives private investors the opportunity to access a wide range of corporate bonds and these latest issues - offering tools to reflect both inflation and interest rates - will further add to the diversity of bonds on our order book.”

The new RBS bonds will also be the first on ORB to be quoted in terms of their ‘dirty’ price. On ORB prices for all other bonds are currently quoted on a ‘clean’ basis. This follows the standard quoting convention in the institutional bond markets. A ‘clean’ price is one where accrued interest is not included. The ‘dirty’ price is the clean price plus the accrued interest. Factsheets on ‘clean’ and ‘dirty’ pricing and the calculation of accrued interest are available on the London Stock Exchange website.

Launched on 1 February 2010 in response to strong private investor demand for greater access to fixed income, the new order book now offers simple, transparent access to 50 UK gilts, 88 corporate bonds and three supranational bonds all tradable in easily manageable sizes. Bonds currently available for trading include securities issued by Lloyds TSB, Provident Financial, Tesco, BT, National Grid, GlaxoSmithKline, Unilever, Vodafone, Marks & Spencer, Kingfisher, Rolls Royce, Centrica and Imperial Tobacco.

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