Severn Trent to tap retail bond market

Water company Severn Trent is targeting retail investors with the launch of a 10-year sterling bond with a coupon linked to the retail prices index.

Water company Severn Trent is targeting retail investors with the launch of a 10-year sterling bond with a coupon linked to the retail prices index.

The bonds will pay interest semi-annually at a real rate of interest of 1.3% per annum adjusted to take account of changes in the level of the UK Retail Prices Index (RPI). The bonds, to be issued at £100 a throw, could, however, end up paying less than 1.3% per year if the UK experiences deflation.

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