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Optivo sells £75m of retained bonds
Large London housing association Optivo has raised £75m by selling bonds it retained from an earlier issue.
The money comes from a £250m bond it issued in March last year. At the time it chose to retain £100m of the funds, meaning it did not receive them immediately but reserved the option to draw them down at a later date.
At the time it priced the funds at an overall interest rate of 3.283%, which then was 1.4% higher than the cost of equivalent government borrowing.
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In April Optivo sold £25m of the £100m it had retained, and yesterday it sold the remaining £75m worth.
The past few months have seen a slew of new housing association loans as the social housing sector prepares for Brexit.
This news comes immediately after credit ratings agency Moody’s downgraded the outlook on Optivo’s A2 credit rating to negative, meaning it may downgrade the rating itself in future.
It said that this “reflects Optivo’s development ambitions in a context of a softening property market and weaker economic outlook, which will result in increasing debt levels and higher capital spending and development risk, as well as weaker interest coverage, with financial metrics moving to levels more closely aligned with A3 peers”.
