Landlords plan £500m bond deals

Affinity Sutton, Amicus Horizon, Family Mosaic and Midland Heart all plan to tap the capital markets in 2012 after access to long-term bank debt all but disappeared over the past few months.

Family Mosaic expects to raise around £150 million in its debut public bond issue and is in the process of obtaining a credit rating from ratings agency Moody’s.

Ken Youngman, finance director at Family Mosaic, said it would go to the market ‘at some time in 2012’ with what is likely to be a secured issue.

Mr Youngman added that the 20,000-home association was currently preparing housing to use as security.

‘Market turbulence might affect the decision [of when to issue the bond],’ he said. ‘But we are putting the building blocks in place so we can move quickly if we need to,’ he said.

Affinity Sutton, which owns and manages 56,000 homes, is finalising plans to raise £200 million in another secured issue in the second quarter of next year. The association was the first to issue a bond post-credit crunch when it raised £250 million in 2008.

Midland Heart, which owns and manages 32,000 homes in the midlands, is also securing properties in advance of a £150 million bond, which could go to market as early as July 2012.

‘The capital markets are where people see the value at the moment,’ said Ruth Cooke, finance director at Midland Heart.

As Inside Housing revealed last week, the last two major bank funders of the sector - Royal Bank of Scotland and Santander - both recently called an effective halt to long-term financing.

Meanwhile, 28,000-home Amicus Horizon is understood to be going to the market next year for its first own-name issue. Sources expect the bond to be worth at least £100 million, although Amicus Horizon declined to comment.

Catalyst Housing Group, which manages 20,000 homes, is also seeking to raise up to £150 million of new money in early 2012, although it is more likely to do so through short-term revolving bank loans and private placements, rather than a public bond issue.