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Social housing bond aggregator Blend has issued a £33m bond tap for Teign Housing after receiving enquiries from two institutional investors.
Blend, part of The Housing Finance Corporation (THFC), said it received enquiries from institutional funders with a particular investment need that matched the profile of UK social housing and was able to align this with Teign’s 33-year loan.
The 3,200-home Devon-based landlord received £33m from the tap at a spread of +115 basis points (bps) over gilts, the government cost of borrowing. Blend said the spread equates to a -1bps new issue premium, reflecting the aggregator’s popularity.
The all-in rate on the transaction, which has a 2054 maturity date, was 2.41%.
Blend said that the reverse enquiry from investors demonstrates the appetite for UK social housing among investors looking for long-dated, low-risk and stable investments.
The transaction takes Blend’s total issuance to £988m, of which £160m was issued in 2021 alone.
Jo Reece, chief executive of Teign Housing, said: “To secure long-term funding at this rate allows us to maintain the strong financial profile which underpins our business and the services we offer tenants.
“As a member of the Blend pool moving forward we’re well placed to quickly and easily access new funding as we continue to invest in our stock and build new, quality social homes for our communities.”
Piers Williamson, chief executive of Blend, said: “We are already getting the bit between our teeth with four transactions completed since January. We continue to innovate with our MTN structure and Blend’s success lies in the simplicity of its model and the ease with which our borrowers can access funding, as well as our strong credit rating.
“To be able to secure a negative new issue premium through a reverse enquiry is testament to investor confidence in Blend, and it is this confidence which will underpin the future growth we have planned for the new financial year.”
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