South East landlord issues debut £350m sustainability bond
Paradigm Housing Group has issued its first sustainability bond, which is worth £350m and has a coupon of 2.250%.
The 15,000-home landlord said the funds will be used to develop new affordable housing and invest in existing homes to meet its target of becoming a net zero-carbon business by 2050.
Paradigm sold £250m to investors in the first instance, retaining £100m to be used at a later date. The association achieved a credit spread of 88 basis points over gilts – the government cost of borrowing – resulting in an all-in cost of 2.279%.
The bond, which was three times oversubscribed, aligns with Paradigm’s Sustainability Finance Framework, which embeds environmental, social and governance (ESG) factors into the group’s strategy.
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The announcement follows Paradigm’s recent credit rating of ‘A+’ from Standard & Poor’s, which expects the association to deliver on its development programme.
Nicola Ewen, executive director of finance at Paradigm, said: “We are pleased to have issued our debut sustainable bond to support our newly published corporate plan.
“The rating we received and the feedback on the issue reinforces our financial strength, strong management and our commitment to building and investing in safe and sustainable homes in our operating area.”
Paradigm has committed to publishing an annual report disclosing the use of bond proceeds, which will be made available on the landlord’s website.
The issuance forms part of a wider refinancing to give Paradigm a strong long-term foundation to deliver on objectives in its new corporate plan, the association said.
Matthew Bailes, chief executive of Paradigm, said: “The feedback we got from investors and the margin we achieved reflected the strength of the business and the grip we have on efficiency, risk, development and operational delivery.”
Centrus acted as financial advisors on the transaction, while Barclays, Lloyds and NAB were bookrunners.
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