Sovereign, one of the UK’s leading affordable housing providers, has successfully launched and priced a £175m debut 30 year bond issue.
The deal, which is rated Aa2/AA- by Moody’s and Standard and Poor’s, stands out from recent deals in the housing sector due to the excellent rate secured. The bond proved to be very popular with investors and the rate was driven down to 5.705%, one of the best new deal rates since 2004. This rate reflects the credit and financial strength of Sovereign and may also signal a brighter future for funding within the housing sector.
The bond will initially be lent to and guaranteed by Sovereign South + West, the largest member of the Group, however, the structure gives flexibility and will allow other members of the Group to enter the borrowing arrangements.
The bonds are secured on a portfolio of high quality social housing assets across the South and South-West of England. TradeRisks, the investment banking boutique, acted as Arranger for the transaction with Lloyds TSB Corporate Markets acting as Sole Bookrunner.
Martin Huckerby, Group Finance Director of Sovereign, said, “Sovereign has an excellent track record of successful investment, both in new build development and in stock rationalisation. With direct and continuing access to the capital markets, we will have the flexibility to both deliver our existing development plans and take advantage of the many high quality investment opportunities in our operating region.”
