M&S to redress pensions deficit with bonds sales

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M&S to redress pensions deficit with bonds sales

LONDON, UK - UK retail giant Marks & Spencer is planning to issue bonds by the end of next month, in an effort to plug a £400 million hole in its pension fund.

The company announced its decision to release £400 million worth of bonds following an investigation by actuaries and is now seeking to exploit the growing popularity of corporate debt among investors.

The review of the pension fund found that the company's pension fund assets were £585 million short of liabilities totalling £3.19 billion.

The bond sale will increase the funding of the company's UK benefit pension program to 94 per cent from 82 percent.

“By taking this action we are providing reassurance to the scheme members,” Marks & Spencer Finance Director Alison Reed said in the statement. “We believe that this is an opportune time to raise the funds, taking into account current interest rates and demand in the corporate bond markets.”

M&S has now closed its final salary scheme to new entrants.

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