Thursday, 27 November 2014

Peabody issues £200m bond

Peabody has raised £200 million on the UK bond market.

The London association, which owns or manages more than 19,000 homes, achieved a cost of funds of 5.32 per cent. The spread over gilt, the cost of funds minus the price of government bonds, was 1 per cent, equalling Sanctuary’s £200 million issue last year as the best priced own name issue by a housing association in recent years.

Stephen Howlett, chief executive of Peabody, said: ‘The reception from investors was universally positive. We are delighted to secure this funding for Peabody’s growth. It will enable us to provide homes and services to more people in London into the future.’

The issue was more expensive, however, than January’s club deal by the Housing Finance Corporation, which came in at 99 basis points above gilt. Proceeds from the Peabody issue will be used to fund development.

The bond was arranged by consultancy Traderisks, with Barclays Capital and Santander acting as joint book-runners. Peabody last month secured an AA2 rating from Moody’s, the third best rating available.

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