Clarion Housing Group, the UK’s largest social landlord, has tapped an existing bond for £50m with its lowest-ever credit spread and an all-in rate of 1.77%.
The 125,000-home housing association tapped its 2048 bond, originally issued in 2018, at just 88 basis points (bps) over gilts – the government cost of borrowing.
The all-in yield on the transaction was 1.77% with a coupon on the paper of 3.125%.
Clarion’s spread on the deal marks a tightening on its most recent bond issue from November 2020 when it achieved 95 bps on a £300m, 12-year bond.
The deal forms part of Clarion’s £3bn Euro Medium-Term Note (EMTN) programme, established in 2017, which offers the housing association flexibility to draw down money from the platform in reaction to the market.
Gareth Francis, director of treasury and corporate finance at Clarion, said: “Once again, our EMTN programme has allowed us to move quickly to take advantage of favourable conditions.
“The finance raised will contribute to our core mission to provide good quality, affordable homes.”
Clarion has a credit rating of A3 stable from Moody’s and ‘A’ with a negative outlook from Standard & Poor’s.
It currently has a G1/V1 grading for governance and financial viability from the Regulator of Social Housing, the highest possible.