LONDON Horse racing fans have backed a 15 million pound bond scheme that offers interest and discounts on tickets in return for helping to pay for the redevelopment of the Cheltenham course in western England.
The Jockey Club, the owners of Cheltenham, have hit their investment target for the bond and will take applications until May 28 to mop up additional demand.
"To raise more than 15 million pounds and counting in just over three weeks from our first foray into consumer finance makes us incredibly proud," Paul Fisher, group managing director of Jockey Club racecourses, said on Friday.
Cheltenham hosts a four-day festival every March that is one of the highlights of the jump racing calendar and always draws thousands of Irish fans who come over for it. It attracted total crowds of 235,000 this year, including Prince William and his pregnant wife Kate Middleton, despite the freezing weather.
By contrast, English race courses at Hereford and Folkestone were forced to close last year, showing the struggle that lower profile venues face to make money.
Around 1,500 people have bought the Cheltenham bonds, with an average investment of 11,000 pounds, the Jockey Club said.
The Jockey Club is planning to spend 45 million pounds on improvements for Cheltenham, adding a new grandstand and more luxurious royal box by 2016. The rest of the funding will come from bank financing, commercial deals, debenture sales and cash flow.
The five-year bond pays gross interest of 4.75 percent - compared with a return of between 2.50 and 3 percent for investments offered by high street banks in Britain.
Investors also get the chance to sign up for racing reward points, valued at an additional 3 percent annually, which they can cash in online to pay for tickets, hospitality packages or food and drink at the Jockey Club's 15 British race courses.
The retail bond scheme, combining interest and redeemable points, is similar to one which retailer John Lewis used to raise more than 50 million pounds in 2011.
One downside for the racing bond investors is that they are not covered by a compensation scheme protecting those who put their money into more conventional bank products.
Around six million Britons went to races last year, making it the second most popular spectator sport after football.
(Editing by Sophie Walker)