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Housing association issues £250m bond
A London housing association has issued a £250m bond, with £100m retained.
Optivo, based in Croydon, priced the 30-year deal last week, as it seeks to fund its ambition to build 1,500 new homes a year.
A total of 13 investors bought bonds, of which 10 were new to the housing association.
The deal priced at a rate of 3.283%, which is 1.4% higher than equivalent government borrowing.
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Tom Paul, director of treasury and commercial at Optivo, told Inside Housing he was “pleased” with the result.
“It reflects the strength of our strategic plan and our brand, and shows confidence in our leadership,” he said. “It underlines support for our strategies for risk management of sales exposure and recognises our post-amalgamation integration process is well underway.”
Optivo was created through the merger of Amicus Horizon and Viridian to form a housing association with 44,000 homes spread across London, the South East and the Midlands.
The issue is marginally more expensive than the £250m raised last month by L&Q, at 1.35% more than government borrowing and a rate of 3.125%. That finance had a 35-year maturity.
Trowers & Hamlins provided legal advice, along with Allen & Overy. JLL conducted valuations.
Optivo was given an A2 credit rating by Moody’s ahead of the bond issuance, which is among the highest ratings the agency issues for the sector.
