Specialist lender Paragon Group (PAG) has hit the road with a retail bond aimed at investors who want an indirect way of accessing the UK's buoyant buy-to-let housing market. The lender, which both securitises the lending its makes, as well as managing portfolios for third parties, is looking to add directly to its corporate cash pile by issuing a senior unsecured bond that will pay a relatively generous annual coupon of 6 per cent and which matures in Dec 2020.
Some market observers reckon that Paragon could have issued a successful bond with a lower coupon, given its status as a FTSE 250 company, but it seems the priority was to test the effectiveness of the retail market in raising funds. The company has already indicated at a roadshow that the fundraising is not intended as a short-term refinancing exercise as most of Paragon's lending is backed through to maturity, though the company does have a £110m corporate bond due in 2017.