Tuesday, 17 January 2017

London landlord issues £250 million bond

Notting Hill Housing Trust issued a £250 million bond at an interest rate of 4.472 per cent yesterday.

The 40-year bond was priced at 98 basis points above gilts – the price of government borrowing.

The 25,000-home landlord will use £175 million to fund its development programme, which will include the construction of approximately 1,400 homes each year until 2020, including private rented sector homes.

It will use the remaining £75 million to refinance existing debts.

Paul Phillips, finance director at Notting Hill, said the bond was over-subscribed with the book peaking at £450 million. The joint book runners to the issue are Barclays, Lloyds and Santander. 

‘It’s a good deal, the markets appear to be open and interested in investing at the moment,’ Mr Phillips said.

‘People like Notting Hill, they like the story, and we’re focused on high-demand, high-value central London properties which helps.’

Earlier this month, Southern Housing Group raised £175 million when it issued its first own name bond.

The group issued a £125 million listed bond, with £75 million drawn now and with an option via a retained bond to draw a further £50 million at any time in the next five years.

The 25-year bond was issued at a rate of 4.5 per cent.

Rosemary Farrar, group finance director, said the money raised would ensure availability of funds for the group’s business plan and development agenda.

Tom Dacey, group chief executive of Southern Housing, said: ‘With the very limited government grant now available to housing associations the money raised by this bond issue will allow us to continue operating successfully and re-investing into our business for the benefit of our residents.’

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