The community interest company Bristol Together is planning a bond issue worth £1.6m over the next year to expand a scheme that provides employment and training for ex-offenders.
Bristol Together, which employs ex-offenders on building projects to develop skills before it helps them find further employment, said the bond would be the first of its kind issued by a social enterprise.
Money raised from the bond will be used to buy properties in Bristol that ex-offenders can renovate before those buildings are sold, bringing in further cash to buy more buildings and employ more ex-offenders. The CIC hopes eventually to expand the operation out of Bristol to other cities around the UK.
The CIC hopes that early next year it will be able to issue more bonds worth £1m, partly to charities and partly to wealthy individuals who are clients of Triodos. Bonds sold to private individuals will attract community investment tax relief, which allows investors to reduce their tax bills by 5 per cent a year.
Lydia Westmore, a corporate finance manager at Triodos, said the CIC had been able to raise finance much more cheaply than commercial companies.
"This bond issue will allow the CIC to create a sustainable business model," she said. "We think it will be attractive to high-net-worth individuals.
"We think that it will be able to issue a bond with a considerably lower rate than a normal first-time corporate bond, particularly because the use of CITR, and the asset-backed nature of the bond, makes it quite an attractive proposition."
The CIC’s bond issue comes after the announcement by the disability charity Scope that it planned to issue £20m in listed bonds over the next few years. The bond issue is the first by a major operational charity.