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London housing association issues £100m bond tap at sub-2%

By 15/09/2020No Comments

London-based housing association RHP has tapped £100m of its existing bonds at an all-in yield of 1.787%.

Picture: Getty

Picture: Getty


London housing association taps issues £100m bond tap at sub-2% #UKhousing

@RHP_UK taps bond at 105bps with all-in rate of 1.787% #UKhousing

The 10,000-home landlord tapped its 2048 bond at 105 basis points above gilts (bps) – the current cost of government borrowing – in what it claimed is the tightest new-issue spread on a long-dated housing association bond since lockdown began late March.

RHP said the bond was “well-oversubscribed” with around £400m of orders and will be used to deliver affordable homes for the “priced out” generation of young people in south-west London, where it operates.

Larger housing associations Hyde and Midland Heart recently issued bonds at 130bps and 120bps respectively.

Corinna Bishopp, executive director of finance at RHP, said she was pleased with the level of investor interest.

She added: “This financing will allow us to make considerable progress with our ambitions to support our local community and provide more desperately needed housing.

“This is particularly the case where we’re planning to build more homes for people who currently can’t afford to rent on the private market or buy within our operating areas.

“It will also mean we can invest more in existing homes through our new home standard and major safety programmes to make sure our homes are good quality, safe and secure.”

Kirsty Garrett, director of debt capital markets at Lloyds Bank, the bookrunner on the deal, said: “Lloyds Bank was delighted to support RHP’s return to the capital markets. Investors welcomed a new transaction from such a well-rated borrower.

“The virtual roadshow was well attended and the pricing achieved was among the lowest ever for the sector – a testament to the strength of the RHP credit story.”

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