Severn Trent’s inflation-linked bond issue is the first move by a water company into the fast-growing market for RPI-linked bonds. The deal was jointly arranged by Investec and a Barclays team that included directors Toby Croasdell of the fixed income syndicate and Charlotte Weir of corporate debt capital markets. This deal means that the Barclays team has worked on all three of the most recent UK retail transactions listed on the London Stock Exchange’s Order Book for Retail Bonds (ORB). Besides Severn Trent, this includes last November’s Tesco Bank issue and October’s Provident Financial bonds. In addition the team has arranged and distributed a number of landmark retail bond issues, helped by the growing market for UK corporate issuers. Transactions include National Grid’s £282.5m RPI-linked bond 10-year sterling issue, the first inflation-linked bond listed on ORB. As an ORB member Barclays is a market maker for bonds listed on the electronic trading platform. Yesterday Severn Trent’s Mike McKeon said the RPI-linked bond market was “very thin at the moment” but that he expected more use of the format, which has proved to be a success in the US. Barclays will hope that this means that it can profit from this development.