West Midlands housing association raises £280m on bond markets

Ian Hill, director of governance at WM Housing, said the association was “delighted” by the level of interest despite a “relatively unpredictable market”.

He said the cash would allow the housing association to almost double its development ambitions from 300 homes to 500 a year. The cash will also be reused to refinance some current debt.

It is the first bond issued by the association since Whitefriars, now part of its group structure, went to the markets in 2013.

Mr Hill said investors had not shown much of a change in attitude based on the rent settlement, which was announced on 4 October, just over a week before the organisation began roadshowing.

The announcement of a Consumer Price Index plus 1% deal for five years from 2025 has been widely received as positive by investors and rating agents.

WM Housing’s bond is the second own-name deal issued since the new rent settlement was announced, following Notting Hill’s £400m 31-year bond at exactly the same interest rate on 9 October.

The bookrunners on the WM Housing deal were Barclays and Santander. The association has a rating from Moody’s of A3 (stable), the same rating as Notting Hill Housing.

Of the 500 units WM Housing plans to develop each year, 400 will be either shared ownership or affordable rent. The other 100 units will be for market sale and will be delivered through its subsidiary Signature Homes.

The organisation reported an annual turnover of £151.1m for the last financial year.

Housing associations typically seek longer-term finance through bonds on the capital markets, and shorter-term loans from banks.