Large national housing association Riverside has completed a £150m private bond issue with a US investor.
It is the second major deal for Riverside this year after it completed a £100m loan facility in April (picture: Getty)
The private placement with Pricoa will be split into two deferred issuances: the first £50m series A note will close in March 2021 and mature in 2041; and the second £100m series B note will close in September 2021 and mature in 2051.
The shorter series A note was priced at an all-in coupon of 2%, with the longer series B note at 2.5%.
Pricoa is a US global asset manager with a portfolio of $97bn and 14 offices around the world.
HSBC and Devonshires arranged the deal, with Addleshaw and Goddard advising Pricoa.
It is the second major deal for Riverside this year after it completed a £100m loan facility in April. The deal was the first revolving credit facility indexed exclusively on a Sterling Overnight Index Average (SONIA) interest benchmark.
The deal, which saw the restatement of its existing facility with Lloyds Banking Group, will “future-proof” the group’s credit line with the London Interbank Offered Rate (LIBOR), which is due to stop at the end of 2021.
Gary Grigor, banking partner at Devonshires, says: “This substantial investment by Pricoa is hugely significant. Not only does it show the commercial appetite to support Riverside’s ongoing business objectives, but also the ongoing desire to invest in the social housing sector in the UK as a whole at relatively low margins.”