Tuesday, 17 January 2017

AHF issues £194m guaranteed bond

A government-guaranteed bond has raised £194m for seven housing associations at one of the lowest interest rates ever seen in the sector.

Affordable Housing Finance (AHF) announced a tap of its second bond this afternoon, which priced at 0.43% above the cost of government borrowing.

Inside Housing revealed last week that AHF was preparing the transaction.

That means the all-in cost of the finance is 2.71% – the lowest price for a large issue under the programme to date.

The price represents a substantial fall on the 3.76% for AHF’s first bond issuance in May 2014. It is the fifth-largest bond issued under the programme.

Demand for the transaction was said to be very good, with orders from at least one overseas central bank.

It means AHF has raised more than £1bn in bonds under the Affordable Homes Guarantees Programme (AHGP), which sees the government guarantee debt to reduce the cost.

Last year, the government decided not to renew the programme when it expires in March, but in practice it will not exhaust the current programme for several months.

It has also secured £1.5bn of potential investment from the European Investment Bank under the scheme, which is likely to fund 29,000 affordable homes by the time it closes.

Piers Williamson, chief executive of AHF, said: “Passing the £1bn bond barrier is a real statement of the success of the AHGP.

“The very low cost of funding has helped deliver a very significant number of badly needed affordable homes.”

Bromford, Gateway, Merlin, Oxford Citizens, BPHA, Viridian and Wales and West all took money under the scheme, which must be used to fund new affordable housing.

Readers' comments

Comments are only open to subscribers of Inside Housing

Already a subscriber?

If you’re already a subscriber to Inside Housing, your subscription may not be linked to your online account. You can link your subscription from within the My Account section of the website and clicking on Link My Account.

Not yet a subscriber?

If you don't yet subscribe to Inside Housing, please visit our subscription page to view our various subscription packages.

Have your say

You must sign in to make a comment

sign in register

Newsletter Sign-up

Related

Articles

  • AHF secures £114.8m record low bond

    12 January 2017

    Two housing associations have secured a £114.8m bond at a record low rate under the government’s guaranteed finance scheme.

  • Aberdeen Council issues £370m bond

    3 November 2016

    Aberdeen City Council has issued a £370m bond to fund its capital and infrastructure programme.

  • PfP issues £400m unsecured bond

    12 August 2016

    Places for People (PfP) has taken advantage of the falling cost of government debt to issue a £400m bond – the largest issued by a single association in the sector’s history.

  • AHF issues £191m bond at record low rate

    28 July 2016

    A bond aggregator has taken advantage of a sharp drop in the cost of government bonds to raise £191.4m for five landlords at a record low all-in rate.

  • Latest AHF bond raises £161m

    26 May 2016

    A bond aggregator has raised £161m of development finance at record low rates, despite a slowdown in trading ahead of the EU referendum.

IH Subscription