Lancashire County Cricket Club (LCCC) has launched a new retail bond in the hope of raising £3m to build a new hotel at its Old Trafford ground in Manchester.

Investors are being invited to put money into a five-year initial fixed-term bond offering 7 per cent gross interest per annum for investments from £1,000.

The interest will be made up of 5 per cent paid in cash and 2 per cent in Credit4Cricket vouchers, which can be redeemed against the international tickets and hospitality products at LCCC, including food and beverage packages and membership fees.

While the returns are higher than the average rate on a savings account, the LCCC scheme is not protected by the Financial Services Compensation Scheme – a safety net that protects the first £85,000 of savings.

According to LCCC chief executive Daniel Gidney, the initiative is part of the club’s plans to develop Old Trafford into a world-leading cricketing venue.

“Our vision is for Emirates Old Trafford to provide one of the best sports, entertainment and business experiences in world cricket,” he said.

“We are looking to develop an attractive, contemporary hotel that will appeal to corporate visitors and private customers alike is central to this aim.”

• LCCC isn’t the first sport organisation or company looking to raise funds by issuing a bond. Last year, the Jockey Club unveiled a Racecourse Bond in order to fund a grandstand development at the group's Cheltenham Racecourse.