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Hightown raises £31.5m from retail charity bond
Hertfordshire-based housing association Hightown has raised £31.5m from its retail charity bond following high demand.
The association closed the bond eight days early after strong demand from investors for the bond, which will pay a fixed rate of interest of 4% a year and will mature in 2027.
This is the second bond issued for Hightown through Retail Charity Bonds, a platform created by social investment charity Allia. It was issued at a slightly cheaper rate than the previous bond, which raised £27.5m at an interest rate of 4.4%.
The association plans to build more than 1,000 homes in the next two years, 75% of which will be for social, affordable or intermediate rent.
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David Bogle, chief executive of Hightown, said: “We embarked on this funding route as it presents an opportunity for ethically minded investors to contribute to the delivery of much-needed affordable homes.
“Once again, the early closure of the retail charity bond underlines the value of building the affordable homes that our region so desperately needs.”
This is Allia’s sixth transaction through the platform, which saw Dolphin secure £24.7m in just 24 hours this June, suggesting a strong appetite among investors for this kind of bond.
Phil Caroe, director of impact finance at Allia, said: “This latest successful retail charity bond issue confirms both the market’s confidence in Hightown and its appetite for investments offering a positive social impact.
“With three successful retail charity bond issues this year totalling nearly £90m, the retail bond market continues to offer an attractive source of unsecured loan finance for housing associations and other charitable borrowers.”
Henrietta Podd, a director in the JCRA/Peel Hunt debt capital markets team, said: “The retail charity bonds platform was set up to simplify access to the capital markets for strong charities like Hightown.
“Their second 10-year unsecured bond, with a lower coupon and including a retained bond facility for future funding, demonstrates the efficiency and effectiveness of the platform.”
