ao link
Twitter
Facebook
Linked In
Twitter
Facebook
Linked In

You are viewing 1 of your 1 free articles

Aggregator taps bond to raise £125m for two housing associations

Housing association bond aggregator Blend Funding has tapped its benchmark 28-year bond, raising £125m at an all-in rate of 2.25%.

Linked InTwitterFacebookeCard
Picture: Getty
Picture: Getty
Sharelines

Aggregator taps bond to raise £125m for two housing associations #ukhousing

.@WDHupdate and @TheRegendaGroup access bond markets via aggregator #ukhousing

Proceeds from the tap, which achieved a spread of 1.68% over the government cost of borrowing, will go to WDH and The Regenda Group.

The transaction was three times oversubscribed with interest from two new overseas investors, according to the A2-rated aggregator (rating from Moody’s), which is a subsidiary of The Housing Finance Corporation (THFC).

It follows a spate of oversubscribed own-name bond deals from associations such as Sovereign, Together Housing, The Guinness Partnership and Sanctuary, which were achieved despite market disruption caused by coronavirus.

The yield of 2.25% marks the third sub-3% rate by THFC in 2020 alone.


READ MORE

Home Group secures additional £100m bond issueHome Group secures additional £100m bond issue
Several housing associations included in Bank of England coronavirus bond purchase schemeSeveral housing associations included in Bank of England coronavirus bond purchase scheme
There may be no better time than now for associations to approach the bond marketThere may be no better time than now for associations to approach the bond market

John Austin, director of finance at 30,000-home WDH, said: “Today’s transaction has been a long time in the works, and it was clearly worth it.

“We’re very pleased to have got through Blend such a low cost of funds, and thanks to the ease of the whole process we will be able to use these funds straight away to support our business model and deliver for our communities.”

Tony Russell, executive director of resources at 11,000-home Regenda, said: “Our first experience with Blend was smooth and straightforward, but now as a member of the borrower pool we have been able to access the markets with even greater ease to take advantage of positive conditions in the capital markets and meet our funding needs to further our regeneration strategy.”

Regenda secured a £25m bond issued through Blend in June last year.

Piers Williamson, chief executive of THFC, noted that housing associations are seen by investors as low-risk, long-term investments.

He added: “It has been noticeable throughout the past seven weeks that investors have noted the defensive qualities of housing associations.

“We have been able to demonstrate very effectively the concrete steps that associations are taking to mitigate operational risk as well as development and sales risk.”

 

Update at 17:40 14.05 : Story initially said the transaction was THFC’s third sub-35 rate achieved in 2020. This has now been changed to sub-3%.

Sign up for our development and finance newsletter

Sign up for our development and finance newsletter
Linked InTwitterFacebookeCard
Add New Comment
You must be logged in to comment.