Minimum limit for issuing retail charity bonds to be halved

The minimum limit for issuing retail charity bonds has been halved to £5m.

The government this week announced it would lower the threshold after a consultation that ran between March and June.

The consultation looked at potential changes to the regulations on taxation of securitisation companies and asked respondents for their views on issues including lowering the minimum issue bond size.

Retail charity bonds, which can be used by charities to raise loan finance, are issued by RCB Bonds PLC, a special purpose vehicle that falls under a specific category for tax treatment as a securitisation company.

Under the previous regulations, securitisation companies could only issue a minimum of £10m at a time.

But the responsible finance body Allia C&C, the Impact Investing Institute, Big Society Capital and Social Enterprise UK had called for the lower limit to be halved in a joint submission to the consultation.

In its response, the government acknowledged the strong support from charities and social impact organisations for lowering the threshold and agreed that it should be reduced to £5m.

Adrian Bell, chief executive of Allia C&C, said: “We’re delighted with this result, which comes after seven years of lobbying for change.

“RCB was created to make it possible to raise small amounts through listed bonds, and the reduction in the threshold to £5m will now open up the bond markets to many more smaller borrowers.”

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