The National Grid has reopened its inflation-linked bond, looking to raise an extra £10 million after the strong response to its initial issue last month.

The bond, which offers a return of 1.25 per cent on top of the Retail Price Index (RPI), originally attracted over 10,000 investors and raised £260 million.

The amount raised was a record for a bond issued on the London Stock Exchange’s ORB, the order book for retail bonds, since its introduction in February 2010.

The new issue will have an issue price of 101.35 per cent plus 15 days of accrued interest underwritten by joint lead managers Barclays Capital and Evolution.

Interest in the re-issue is likely to be high, as investors scramble for inflation-proof investments in the face of economic turmoil.

Malcolm Cooper, global tax and treasury director at National Grid, Said, ‘We are delighted at the success of our first retail bond and, having seen that there is still additional demand for this product, we have reopened this offer to give investors another opportunity to buy.’

The ten-year bond, which requires a minimum investment of £2,000, was the first inflation-linked retail bond to be issued by a non-financial institution.

The National Grid, which issued the bond to raise money for its £3 billion annual maintenance fee, is one of a number of institutions starting to take advantage of ORB as an alternative source of investment.

The Post Office has also moved to take advantage of investors worried about inflation, issuing the third round of its inflation-linked bond earlier this month, which will be available until January 2012.

The bond is available in two incarnations, the three-year bond offering a return of RPI plus 0.25 per cent and the five-year bond offering RPI plus 1 per cent.