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London-based housing association Peabody has raised £450m through a bond issue.
The 55,000-home landlord, which completed a merger with Family Mosaic last year, revealed in a filing to the stock market that the 30-year bonds will be issued tomorrow through its subsidiary Peabody Capital No.2 at a coupon of 3.25%.
It had initially planned to raise £350m, but has added £100m of retained finance to the issue to be drawn down at a later date.
The bond priced at an interest rate 1.55% more expensive than equivalent government borrowing (gilts) – a marginally wider price than some recent housing association deals.
Peabody held meetings in London and Edinburgh earlier this month, arranged by joint bookrunners on the deal Barclays, HSBC and Santander.
A judgement from Moody’s this month gave the deal an A3 rating with a stable outlook, the same rating for Peabody as an organisation.
The rating, the agency said, reflected the housing association’s “relatively low level of indebtedness and high level of unencumbered assets”.
Peabody last month revealed a slight drop in annual surplus to £175m, which it partly blamed on its merger with Mosaic. Revenue for the group rose 9% to £609m.
The landlord owns 55,700 homes across London, the East and the South East, and invested £250m in new homes and £68m in existing ones over the year.