Saturday, 28 May 2016

Landlord achieves record rate for £250m bond

Affinity Sutton has raised £250 million in the cheapest ever bond issued by a housing association.

The 57,000-home association will pay investors a return of 4.25 per cent for the 30-year secured issue. This represents a cheaper deal than the 4.62 per cent achieved by London & Quadrant for its own £250 million issue in March. The spread over gilts, the price above the cost of government bonds, was 1.25 per cent.

The funds will be used to part-finance Affinity Sutton’s 3,098-home affordable homes programme, along with £65 million of grant.

The association plans to build 2,117 homes for affordable rent, 981 for shared ownership and 83 supported housing units.

Mark Washer, group finance director at Affinity Sutton said: ‘This is a fantastic result for Affinity Sutton.

‘Our strong surpluses and reserves are essential elements of our strong financial profile and clearly demonstrate that we are attractive to investors.

‘With government grant funding for new affordable homes down to an average of just 12 per cent, strong surpluses and increased levels of the capital debt markets are essential to securing our financial future.’

The deal was jointly arranged by RBC Capital Markets, Barclays and Lloyds.

Newsletter Sign-up

Related

Articles

  • L&Q lines up £250m bond

    26 April 2016

    L Q is lining up a 10-year, £250m bond ahead of its proposed mega-merger with two other London landlords.

  • L&Q secures £250m bond after 'fantastic' demand

    16 October 2015

    London’s largest housing association has priced a £250m bond at 1.35% more than the cost of government borrowing – substantially cheaper than a bond issued by another association last month.

  • Government rules blamed for £250m of unspent RTB cash

    24 September 2015

    Councils have hit out at ‘government red tape’ after it emerged almost £250m of cash intended for Right to Buy receipts is currently unspent in London.

  • Metropolitan lines up £250m bond

    17 September 2015

    Metropolitan Housing Trust is preparing to issue a £250m own-name bond, ending the absence of housing associations from the capital markets since the general election.

  • Record £208m guaranteed bond issued

    4 August 2015

    A new government guaranteed bond has raised £208m of development finance for six landlords at the lowest interest rate seen in the sector, despite recent government reforms.

IH Subscription