Investors drink to the bond that offers rewards in wine and a potential 10% a year return

(ThisisMoney) - Wine lovers have a new way to invest in their favourite tipple – a bond issued by Naked Wines, a firm that sources its drink from independent producers globally.

Investors seem to have a taste for the bond as the firm has reached its original target of £3million.

It has a maximum of £5million in bonds available and is open for applications until midnight on Friday.

The money raised will be used to support new wine producers. In return, investors receive a potential seven per cent a year before tax for three years or 10 per cent a year if they opt for wine credits, where they receive vouchers to buy wine from the firm’s suppliers.

The bond cannot be traded and must be held until redemption, which is after a minimum of three years.

As the investment is unregulated, there is no protection from the Financial Services Compensation Scheme if Naked Wines were to collapse.

Naked Wines boss Rowan Gormley, who has worked in private equity and helped set up Virgin Money, admits there is a risk to investors’ money and that the bond is not suitable for those who ‘cannot afford any loss of capital’.

He says investors are ‘overwhelmingly’ opting for wine credits, adding: ‘That must mean they are both investors and wine enthusiasts.’