Sir John Ritblat latest to launch a retail bond

Kasmira Jefford
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SCHOOLS provider Alpha Plus, chaired by property grandee Sir John Ritblat, yesterday became the latest company to tap the retail bond market to help raise £40m and pay down shareholder debt.

The group, owned by Delancey’s DV4 fund, announced plans to launch a seven-year retail bond paying 5.75 per cent and secured against part of Alpha’s £131m schools portfolio.

The group aims to use £40m proceeds from the bond issue to cut debt and any proceeds beyond that and up to £45m for “general corporate purposes”.

The launch follows a string of retail bond launches this year, as companies look to reduce their reliance on banks and diversify their sources of funding. But Alpha’s bond is the first directly secured by a property portfolio.

Unlike cash bond deposits, retail bonds are not covered by the Financial Services Compensation Scheme, leaving investors at risk if a firm goes bust.

Alpha owns and runs 19 nurseries, sixth form colleges and private schools including Prince William and Harry’s preparatory school Wetherby.

In the year to 31 August the company turned over £57.9m, up 62.2 per cent over a five-year period.

Chief exec Graham Able said revenue was “predictably stable” because pupils typically stay in the same school throughout their education.

Sir John, the renowned former British Land boss, said Alpha “combines all the areas that I am most passionate about, delivering a premium education service which generates a stable cash flow and which is also backed by a high quality real estate portfolio.”



Henrietta Podd, head of debt advice and origination at Canaccord Genuity, acted as lead adviser on the Alpha Plus bond issue. An Oxford classics graduate, Podd has spent over 25 years in the bond markets, principally at RBC Capital Markets where she worked for 17 years.

Podd left RBC in 2010 to set up the debt advisory team at Evolution Securities and joined Canaccord in April this year. Adrian Bell, head of debt markets at the firm, worked alongside Podd on the bond deal.

The team has acted for a number of other companies this year who have tapped the retail bond market for cash. In August it helped fund manager ICG to launch its second retail bond, raising £80m. In the same month, Podd and Bell also helped property company CLS Holdings raise £65m through the issue of a retail bond paying 5.5 per cent a year. Commenting on Alpha Plus’s fundraising yesterday Podd said: “We like this business and believe it’s a very attractive bond issue is because Alpha Plus is an educational business with a stable and growing cashflow, which happens to owns some high quality property over which we have security... It contrasts with a lot of the property bond offerings where companies are not offering any security.”