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Aggregator prices £25m bond at sub-2.3% rate amid ‘coronavirus uncertainty’
Housing association bond aggregator Blend has raised £25m for landlord Silva Homes at 2.26%.
Blend tapped its benchmark £270m bond for the deal, at a spread of 1.4 percentage points over the cost of equivalent government debt (gilts). It said that although the bond market had been subdued for the past couple of weeks due to uncertainty resulting from the coronavirus outbreak, its tap was almost four times oversubscribed.
The aggregator, which is a subsidiary of The Housing Finance Corporation (THFC), was launched in 2018.
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This is the second time the THFC Group has come to market this year, with both transactions achieving all-in rates below 2.3% for their underlying borrowers.
Piers Williamson, chief executive of Blend, said: “Today’s deal shows that even in tough conditions, the market is open for tried and trusted organisations with strong credit ratings.”
Silva Homes said it plans to use the money to invest in its development programme and build affordable homes in the South East.
It currently manages around 7,500 rented, leasehold and shared ownership homes across Berkshire and the surrounding areas.
Alan Ward, the association’s chief executive, said the finance deal “demonstrates the confidence that investors have in us as a business”.
