Three corporate bonds make first move to appeal to DIY investors

The London Stock Exchange Group (LSEG) has lowered the minimum investment amount on three of its bonds in a bid to encourage take-up from DIY investors. 

The move follows policy changes from the Financial Conduct Authority (FCA) (previously reported here) that have reduced the administrative burden for companies issuing corporate bonds that come with lower  “denominations”.

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The denomination, or minimum investment amount required to buy one of the bonds fell to£1,000 on Monday 20 April, having previously stood in the hundreds of thousands.

One of the bonds (YX37), originally issued by LSEG itself, comes with a coupon rate of 1.625% and matures in 2030 (ISIN: XS2327297672). 

The other two bonds are issued by one of its entities, LSEG Finance. One comes with a 4.5% coupon rate (XN10) and matures in October 2028 (ISIN: XS3182450372), while the second (XW28) has a 4.875% coupon rate and a maturity date in September 2032 (ISIN:XS3182450539). 

All three bonds currently trade below par value. The bonds are eligible to be held in an ISA and a SIPP.  The bonds can only be purchased over the phone. 

Over time, more companies are expected to offer bonds with lower investment amounts. However, as of yet companies have not rushed to issue bonds with lower denominations, but any such activity would open up a new kind of direct investment to the likes of ii customers. 

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A change in the rules on denominations follows something of a renaissance for direct gilt buying. Interest rate rises pushed the yields on government bonds and higher-quality corporate bonds sharply upward in 2022, offering investors cheaper valuations and more attractive levels of income. Yields move inversely to prices. 

Those who hold a bond to maturity can lock in a return, while gilts have also drawn investors in thanks to their exemption from capital gains tax. 

Having said that, bonds have not always behaved like a safe investment in recent years. They took a bath in 2022, with gilts suffering in particular, and have had a few difficult moments since. Government bonds have failed to act as a safe haven in recent weeks, thanks to concerns about high inflation and interest rates. 

Source: FE Analytics. 2026 data as at 21/04/26. Past performance is not a guide to future performance.

Generally speaking, one role of government bonds and higher-quality (investment grade) corporate bonds is to behave defensively.

However, such bonds are very sensitive to changes in interest rates, with any increase causing them a great deal of pain. Investors who sell in the secondary market as opposed to holding until maturity can experience capital losses.  

For those aiming to buy and hold until maturity, the risk involved with both government bonds and corporate bonds is if the bond issuer runs into trouble. 

For example, it is extremely unlikely that the US or UK government will not repay their loans. But there is a greater risk that governments in less developed countries will not be able to repay bondholders. 

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By contrast high-yield bonds, or the riskier segment of corporate debt, are more reliant on a strong economy and less affected by rate changes. 

As with gilts, buying corporate bonds directly would give investors a very granular form of exposure and a way to lock in a given yield.  

But as with buying gilts (or shares) directly, the research required, and the potential risk, is greater than for those simply buying a fund.