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Clarion launches £3bn debt programme

The UK’s largest housing association has launched a £3bn debt platform to fund development.

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Clarion launches £3bn debt programme

Clarion Housing Group launched the programme via its new subsidiary, Clarion Funding, and will issue notes from it gradually over time.

Barclays, HSBC, Lloyds, RBC Europe and the Royal Bank of Scotland are the banks currently signed up to arrange loans to Clarion from institutional investors under the new programme, but other lenders may be added at a later date. The group has not borrowed any money under the programme yet, but intends to issue £1.5bn of debt over the next four years in its overall borrowing plans.

The platform has an A3 credit rating from Moody’s, the same as the group after it was downgraded along with the rest of the ratings agency’s portfolio.


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The advantage of a structure like this over individual own-name bonds, such as the £500m one issued by L&Q in July this year, is that Clarion can flexibly draw down money from this platform when it is suitable.

To secure the platform, Clarion has moved a large portfolio of 61,921 units, worth more than £5bn, into charge. JLL and Savills have carried out a full revaluation of this portfolio, revising some of their estimates down for high-rise blocks after taking into account the effects on the market of the fire at Grenfell Tower in June.

Last month Keith Exford, chief executive of Clarion, announced that he would retire at the end of March next year. The two directors of Clarion Funding, the new body that will issue debt from the platform, are Gareth Francis, director of treasury and corporate finance at Clarion, and Mark Washer, the group’s chief financial officer.

Latimer, Clarion’s sales arm, is not listed as a potential borrower from the debt platform, indicating that the group intends to use this borrowing to cover the activities of its registered social providers.

Mark Washer, Clarion’s chief financial officer, commented: ”The establishment of an EMTN programme provides the Group with a versatile platform allowing us to access the debt capital markets quickly, underpinning our growth ambitions and commitment to build 50,000 homes over ten years.”

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