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Bromford raids bond market for £300m
Bromford has raised £300m on the bond market to fund its 1,000-home per year development programme.
The West Midlands-based housing association issued the fixed-rate 30-year bond at a price of 1.35% above gilts, the cost of government borrowing.
The pricing marks the lowest issuance in terms of spreads by the sector this year. It is also Bromford’s first own-name bond. Last week, Clarion issued a £250m bond at 1.37% over gilts.
Bromford will use the money to ramp up a development programme which will see it invest £1.5bn to build 14,000 new homes in the Midlands and South West over the next decade.
The association drew down the finance after hosting investors on roadshows in London and Edinburgh earlier this week. Last week, Moody’s confirmed that the 29,000-home landlord had retained its A1 credit rating, despite changing its outlook from ‘stable’ to ‘negative’.
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Lee Gibson, executive director of finance at Bromford, said: “To secure this level of funding fixed over a 30-year period especially taking into account Britain’s prolonged economic uncertainty comes as excellent news and is testament to the strong financial focus we have maintained over a significant period.
"The additional money will ensure we can continue to have the flexibility to develop more new homes that help our customers build and rebuild their lives and we can do this outside the restrictions that grant funding and Section 106 developments can often bring – meaning we can continue building homes where people want to live, creating sustainable and thriving communities.
“Also, because the interest rates are so low and fixed until 2048, it means that we’re spending a minimum amount on interest repayments, freeing up our money to spend on the stuff that really matters to customers.”
