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L&Q completes second £500m bond
London’s largest housing association has priced its second £500m bond in seven months, at a slightly more expensive rate than the last one.
L&Q split the bond into two £250m tranches, one on a 10-year maturity and the other on a 35-year maturity.
The interest rate on the short-term loan was 1.18% more expensive than the cost of government borrowing, with a total interest rate of 2.63%. The long-term loan was slightly more expensive, at 1.35% over government borrowing with a total interest rate of 3.13%.
These prices were slightly more expensive than the previous £500m bond, issued in July last year, although the comparison to government rates was cheaper for the long-term loan.
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That was also split into short and long-term tranches. The short-term loan was priced at 1% above the cost of government borrowing, at a total interest rate of 2.25%. The long-term loan was 1.7% more expensive than government borrowing, at a total interest rate of 2.75%.
Waqar Ahmed, group director of finance at L&Q, said: “This successful bond issuance will allow us to invest in our existing homes and communities, to transform customer service, and to invest in people and skills.
“It will also help us deliver our plans to accelerate the provision of 20,000 much-needed new homes in London, of which 60% will be genuinely affordable as part of our strategic partnership with the mayor of London.
“They will also enable further initiatives that will support smaller housing associations to build more homes in London, the South East and beyond.”
Martin Watts, director of treasury at L&Q, added: “We are delighted that so many blue-chip financial institutions continue to support L&Q and our social objectives.
“This successful bond issuance means that we now have the capital structure to support our corporate plan [and] manage interest rate volatility while retaining enough liquidity to fund our committed development programme.”
