Moody's rating sees housing group raise £millions on bond market
Published by Max Salsbury for 24dash.com in Housing and also in Finance
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A social landlord has successfully secured its funding requirements for the foreseeable future with its first own name bond issue, after receiving an A1 credit rating from Moody’s.
Southern Housing Group's bond has facilities in place worth up to £175 million over the next five years.
SHG has issued a £125m listed bond, with £75m drawn now and with an option via a retained bond to draw a further £50m at any time in the next five years.
The bond was issued at a rate of 4.5% and matures in February 2039.
Group finance director Rosemary Farrar said: “We have a strong business so we have been able to take advantage of favourable market conditions in order to raise this relatively small bond issue. It will allow us to move forward with funding in place to deliver our 30-year business plan with greater operational flexibility.
"It will also allow us to continue with the diversification of our product range as set out in our new Corporate Strategy. We are focusing on providing a range of housing options for our residents no matter what stage of their life they have reached.”
The pricing of the group’s relatively modest issue reflects the stability and strong performance of the business which has reported a surplus of £38.8m in 2012/13, up from £17.9m the previous year.
Tom Dacey, group chief executive said, "With the very limited government grant now available to housing associations the money raised by this bond issue will allow us to continue operating successfully and re-investing back into our business for the benefit of our residents."
Over the last 110 years, SHG has become one of the largest housing associations in the south of England, and presently manages more than 25,500 homes.