Boutique hotel guide and booking service Mr & Mrs Smith is seeking to raise capital to finance its future expansion plans by tapping into the nascent SME retail bond market. Leveraging its strong brand loyalty as a means of funding the next phase of its ambitious growth plan, the firm has invited its loyal customers, boutique hotel lovers and the wider UK retail investor market to register applications for the inaugural ‘Smith Bond’.
Paying a fixed rate of 7.5%, half yearly, the four-year Bond offers a highly competitive rate of interest compared to similar investments currently available, and is likely to prove particularly popular with those seeking fixed income opportunities. As an added incentive, those bondholders who elect to receive their interest in Mr & Mrs Smith Loyalty Money – which can be used towards bookings at any of Mr & Mrs Smith’s 900 plus boutique hotels and houses, all around the World – can boost their return by a full 2% and receive a higher rate of 9.5%. The Smith Bond is believed to be the first SME retail bond to offer investors the option of being paid in a pound-for-pound ‘loyalty currency’, and is the very first bond of its type to be launched by a boutique travel brand.
James Lohan, CEO and co-founder at Mr & Mrs Smith explains the rationale behind this innovative funding solution: “Mr & Mrs Smith is well established in the UK, with a growing presence in the US and Australia, and has captured the imagination of discerning travellers across the globe. It is now time to expand our offering, and to take the Smith brand to customers who want more than a romantic weekend away.
“That’s why we’re expanding further to develop a family of sister brands, covering a whole range of travel wants and needs, from family trips to business and group travel. We will be targeting these new markets in the years ahead, but always with a distinct sense of ‘Smithness’.
“To help expand the brand we’re introducing Smith Bonds. They’re our way of raising the funds we need for our expansion plans while giving our members and supporters the chance to share in the success of our development. We enjoy tremendous loyalty from our customers – be they the hotel and property owners, who value the boost our brand gives to their business, or the hundreds of thousands of stylish travellers who book with us every year. No less than 92% of our customers indicated in a recent survey that they would welcome an opportunity to invest in our expansion.
“The Bond creates an opportunity for our members and supporters to invest in a British success story, and to share in the benefits of our future growth. It’s an inclusive way of raising the funds we need and ensures our interests are even more closely aligned with those of our customers.”
The Smith Bond has a minimum subscription of GBP1,000, and multiples thereof, with no upper limit, with a four year initial term. The offer period opened at 9.00am, on 29 April. Applications can be made until Wednesday 27 June 2012, but the offer will close as soon as the Bond’s target of GBP5 million is reached. The bond’s coupon is 7.5% per annum, or 9.5% for investors electing to receive interest payments in Mr & Mrs Smith Loyalty Money. All bondholders will automatically become members of the ‘BlackSmith’ Travel Club and Loyalty Scheme. The Smith Bond is an unsecured debt of Smith Bonds Plc. The repayment obligations of the Company have been guaranteed by Spy Publishing Limited.
