Norwich City Football Club has successfully issued a bond for £5,000,000. The five year, fixed term unsecured bond is intended to be ring-fenced to be invested in the club’s academy.
The terms of the bond include a 8% annual interest rate that the club will pay to investors, of this 5% of the interest will be paid in cash whilst the remaining 3% will be paid in club credit.
Further, a one off 25% bonus will paid to investors in the event the Canaries are promoted to the Premier League during the term of the bond.
It is worth noting that the club have asked fans to invest rather than donate into the club. Fans can expect a return on their investment whilst also contributing to the advancement of the football club. The investment allows the club to provide funds to its academy without depriving its first team or general club administration of funds.
The club’s managing director, Steve Stone, has suggested that this avenue could set a precedent for other clubs that are interested in investing in its infrastructures. It is certainly a prudent idea for engaging the fans in a constructive way without having to ask for donations.
Specifically, the investment will fund new academy changing rooms and gym facilities.
More than 700 supporters and investors have contributed to the scheme – which originally targeted £3,500,000 – the success of which indicates that other clubs could follow in suit.