Social landlord returns to bond market with record breaking issue

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Affinity Sutton has announced its return to the bond market with the launch of a £250m 30-year, fixed-rate secured bond with a coupon of 4.25%.

The deal, which is rated Aa2 by Moody’s Investor Service, marks the return of the 56,000 home social landlord to the bond market after four years and is the lowest priced coupon ever in the sector.

The proceeds will be used towards the delivery of 3,000 homes under its 2011-2015 Homes and Communities Agency Affordable Homes programme. It also announced last year it was joining forces with property developer Mount Anvil on an ambitious new 36-storey landmark residential tower in Islington (pictured).

Affinity Sutton said the degree of investor appetite for the transaction reflects its financial strength and high credit rating. It said there were over 40 separate investors in the order book which reached £1.1bn, including a number of new names to the sector.

The deal was jointly arranged by RBC Capital Markets, Barclays Bank and Lloyds Banking Group.

Mark Washer, group finance director at Affinity Sutton, said: “This is a fantastic result for Affinity Sutton. Our strong surpluses and reserves are essential elements of our strong financial profile and clearly demonstrate that we are attractive to investors.  With government grant funding for new affordable homes down to an average of just 12% strong surpluses and increased levels of the capital debt markets are essential to securing our financial future.”