Housing provider raises £100 million through bond issue
Published by Max Salsbury for 24dash.com in Housing and also in Finance
A housing provider has raised £100 million through the issue of 15 and 20-year bonds.
Newlon Housing Trust - which owns over 7,000 homes in London - obtained a credit rating of AA3 from Moody’s Investors Services prior to a road show in the US and UK, which resulted in the transaction being three times oversubscribed.
The 15 and 20-year bonds, arranged by Barclays Capital and Deutsche Bank Securities have an average interest rate of 4.31%, representing the second lowest 'all-in' coupon achieved by a housing association in the capital markets to date. Canaccord Genuity Limited acted as the financial advisor to Newlon.
Newlon will use the £100 million to support its growth and for the development of new homes.
The bonds were bought by US and UK investors.
Rita Akushie, Newlon’s deputy chief executive & group finance director, said: “This was our first transaction of this kind and helps to establish a new long-term funding platform for Newlon. We were delighted to raise money at competitive rates which will facilitate our plans for new affordable housing.
"We hope that this shows medium sized housing providers can access the private placement market on terms which are compatible with the largest housing associations and others will now be able to consider this market as a serious option.
"I think it is important to have the right team of advisors, lawyers and agents and I would like to thank ours for delivering such a successful first issue."