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Tesco Bank Retail Bond exceeds target once again

£60M raised in 10 days

Tesco Bank has closed the book on its second Retail Bond, taking orders of £60 million.

Following the success of its inaugural retail bond earlier in the year, Tesco Bank launched its second retail bond issue, an eight-year Retail Bond, linked to the Retail Price Index (RPI). The Retail Bond will be issued by Tesco Bank on 16 December 2011.

The Retail Bond, which was only available through stockbrokers and wealth managers – and was targeted at investors looking for inflation protection - raised £60 million in only 10 days, despite challenging market conditions.

Tesco Bank Retail Bonds will be issued as part of Tesco Bank’s strategy to diversify its funding base ahead of plans to increase the range of services and products offered to customers which, subject to regulatory approval, will eventually include mortgages. 

Benny Higgins, Chief Executive of Tesco Bank commented, 

“We are delighted by the excellent response by investors to what will be the second issue of Tesco Bank Retail Bonds. Although we are principally funded by retail deposits, the success of our second Retail Bond, which once again exceeded our target, shows the keen interest of a broad customer base in both Tesco Bank and in the range of savings and investments that we offer.” 

Over the eight-year term, the Retail Bonds will pay interest twice a year at a 1% annual gross rate of interest adjusted to take account of changes in the RPI*. On maturity, the amount due will be the full value of the bonds plus any overall increase in the RPI.  If the RPI has fallen during the term, Tesco Bank has committed to repay the bonds at no less than their full face value. 

The Tesco Bank RPI-linked Retail Bond is not covered by the Financial Services Compensation Scheme (FSCS). In the unlikely event that Tesco Bank goes out of business or becomes insolvent, the FSCS will not pay compensation to an investor in the Tesco Bank RPI-linked Retail Bonds and customers may lose some or all of their investment.

The Tesco Bank RPI-linked Retail Bond can be bought and sold before maturity on the open market through the London Stock Exchange’s Order Book for Retail Bonds**.

--ENDS--

For more information and media enquiries please contact:

Tesco Bank press office

+44 (0) 131 274 3630 

Notes to Editors: 

* Inflation adjustments will be calculated by comparing the RPI level relating to the month which is 8 months before each payment is due with the RPI level relating to the month which was 8 months before the December 2011 issue date, i.e. April 2011. For more information please read the Information Booklet dated 29 November 2011, Offering Circular dated 16 August 2011 as supplemented by a Supplementary Offering Circular dated 11 November 2011, Drawdown Prospectus dated 29 November 2011 and Final Terms dated 29 November 2011 relating to the Retail Bonds. 

** During market hours and subject to normal market conditions. 

About Us:

Tesco Bank’s goal is to make banking and insurance easier and better value for people who shop at Tesco. We’ve been around since 1997 and today we help more than 5 million customers manage their money every day. Our 4,000 colleagues serve our customers seven days a week from our three main centres in Edinburgh, Glasgow and Newcastle, and we are also available through online and mobile banking 24/7. Tesco Bank participates in the Chartered Banker Professional Standards Board.

Tesco Bank is a trading name of Tesco Personal Finance plc. Registered in Scotland No. SC173199. Registered Office: 2 South Gyle Crescent, Edinburgh, EH12 9FQ

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