It seems that (reasonably) serious money can be raised from private investors after all, provided the offer is attractive enough. With impeccable timing, National Grid offered an index-linked bond paying 1.25% plus RPI inflation just after National Savings had withdrawn its own version. The Grid bond pulled in £260 million, and us buyers could contemplate a very modest instant profit when trading started on Thursday. At tonight’s close it stood at £101.50. The 40p spread between bid and offered implies useful liquidity, too.

Compared to gilts, it still looks good value. Index-linkers of similar dates do not even return your money, adjusted for inflation. The risk is higher, since the Grid’s guarantee is a lot less valuable than that of HMG, and political interference in the company’s vast capital investment programme is inevitable. Moreover, the tax treatment is so punitive that there is no point in a taxpayer buying it except in an ISA or SIPP, which escape income tax and CGT. All things considered, £260 million is quite a result, and should open the market for other big corporates to tap real investors direct.

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