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The UK’s largest housing association has issued its first bond from the £3bn debt platform it launched last October.
Clarion issued a £250m bond with a 30-year maturity, with the interest rate 1.37% higher than the cost of government borrowing, giving a total rate of 3.125%.
The issuance is part of the association’s long-term funding plan to build 50,000 homes over 10 years. As part of this plan, it established its £3bn debt programme in September 2017.
Under this programme, Clarion can flexibly draw down money when suitable. This differs to other recent bond issuances such as L&Q, which issued two £500m bonds in seven months.
This particular bond was 1.6 times subscribed, attracting more than £600m of orders from investors.
Mark Washer, chief financial officer at Clarion, said: “We are delighted by the level of interest in our debut bond issue.
“Despite a challenging market, we were able to capitalise on the excellent progress made by the group since merger, particularly the consolidation of our asset-owning subsidiaries enabling the launch of a single housing association, as well as achieving the highest possible regulatory gradings (G1 and V1).
“Importantly, the finance raised will contribute to our long-term plan to build 50,000 new homes over 10 years.”