SME minibond approach targets UK retail investors

The idea of smaller companies using bonds to fund business development has been highlighted in the UK by the decision of crime reduction technology provider SmartWater to target retail and institutional investors with a £3m minibond issue.

The SmartWater Technology Bond will offer a 7.5% gross annual return, paid every six months. The minimum investment term is three years, and the minimum subscription is £2,000, and thereafter in multiples of £1,000.

The proceeds are intended to fund new product development and boost the company’s market share in both the UK and other markets.

SmartWater’s technology consists of a water based marking agent that contains a unique code for each application. Police can check for the presence of the market using UV light, and the code can then be used to track, for example, stolen goods back to the rightful owners.

The UK is not the only market where minibonds are gaining recognition.

In Italy earlier this year, Monte dei Paschi di Siena (MPS) launched Minibond, the first fund in that country to allow investors access to bonds issued by unlisted Italian SMEs.

That vehicle uses a closed-end fund for qualified investors to invest in debt instruments, mainly so-called ‘minibonds’ issued by Italian SMEs. MPS said at the time that it would facilitate access to liquidity for the country’s SME sector.


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