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Golf travel company launches mini-bond paying 7.5 per cent

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A golf travel company has launched a mini-bond paying 7.5 per cent per annum for a four-year fixed term.

Golfbreaks.com has launched the mini-bond, its second, in an attempt to raise £2m.

Investors will earn a return of 7.5 per cent, paid in cash. However, they must invest a minimum of £2,000, and then can invest in £1,000 increments after that, to a maximum of £100,000.

After the four-year term ends investors can extend the bond a year at a time, or redeem their money.

Despite the appealing headline rates available on mini-bonds, the sector has been plagued with problems recently, as Telegraph Money has covered extensively.

Golfbreaks.com launched a similar bond in 2014, and raised £2.9m.

On the previous four-year bond the company offered a 7.5 per cent rate, or a 10 per cent return if it was paid out in loyalty points to be spent on golf breaks or holidays on its site, or certain sister sites.

The company says it wants to use this latest round of money to expand into the US, Scandinavia and the UK.

Chief executive, Andrew Stanley said, “From the outset of planning our first Golfbreaks Bond, we saw the potential benefits of offering our customers an attractive return on their money by bringing them closer to the business.

“To take us to the next stage we are now reapproaching our loyal customers, as well as the wider investor community, to help accelerate our plans to take a share of the US domestic golf travel market, as well further develop our UK and Scandinavian businesses.”

Mini-bonds offer high rates of return at a time when investors are seeing low, or negative, returns on more traditional bonds, such as those issued by Governments or blue-chip companies.

Paul

The author Paul