Sovereign raises £250m on bond market

The 34,000-home association, which operates in south and south-west England, raised the money through a public own name issue. The all in cost was 4.77 per cent and the spread over gilt, the costs minus the costs of government bonds, was 170 basis points.

SHA says it intends to use the money to build homes. A spokesperson said SHA is not revealing how many homes it intends to build because the association’s board has yet to agree its development strategy. SHG told Inside Housing last summer that it plans to build 4,740 homes by 2015.

Martin Huckerby, finance director at SHA, said: ‘We have acted now because the price is right.

‘We have been able to take advantage of the attractive bond market and low gilt price, and this, ultimately, will allow us to invest more in providing affordable housing, whether through development or through the acquisition of stock.’