Burford Capital (BURF), the litigation finance provider backed by star fund managers Neil Woodford and Mark Barnett, has launched a bond paying 5% annual interest until December 2026.
The coupon on the nine-and-a-half year sterling bond will be paid twice a year. Although less than the 6.5% and 6.125% Burford offered on its two previous bonds, the company says it remains competitive to the yields on equity income funds which typically range between 3-5%.
Both earlier bonds saw strong investor demand and were over subscribed with the 6.125% 2022 bond raising £90 million in 2014 and the 6.125% attracting £100 million last year.
Price rises since their launches on the London Stock Exchange mean the bonds currently yield 5.9% and 5.6% respectively, higher than the new bond’s coupon.
Investors have until 26 May to apply for the new bond although the offer may be closed early if demand is high. Minimum investment is £2,000 and in multiples of £100 after that. Broker Peel Hunt is leading the issue.
Burford has launched the bonds to diversify its source of funding. The AIM-listed company will use the money to finance corporate litigation with Burford taking a share of any payout if a case is successful.
Burford’s business has boomed in the past five years with the shares more than doubling in the past 12 months, buoyed by its acquisition of rival Gerchen Keller.
Invesco Perpetual, where Barnett is head of UK equities, is Burford’s biggest shareholder with a 25% stake, followed by Woodford Investment Management with nearly 10%.