Together Housing is confident it will fulfil ambitious corporate plans in the wake of COVID-19 after securing a financial deal which will enable them to invest in new and existing homes.
The Yorkshire and Lancashire based housing association became one of the first regional associations in the North to enter the bond market with a £250m bond issued in 2012. They went on to sell the retained bonds in 2015.
Now, taking advantage of the low gilt environment amid a return of activity in the sterling market, Together Housing has re-entered the bond market for a £100m tap on its existing bond, resulting in a spread of 150 basis points over gilts, giving an overall yield of 2.113%. The interest from investors was strong and the bond was over-subscribed by almost 3 times.The current deal, which transacted on 6 May 2020, follows other deals secured by Housing Associations, which is testament to the financial strength and security within the sector and indeed Together Housing itself.
Dave Johnson, Group Head of Treasury for Together Housing Group, said,
“Even after the recent issuances from other Registered Providers, there was a very strong support for our bond with the final spread landing at 150 basis points. This support is evident of THG’s financial strength, which helped us achieve a final yield of 2.113%.”
The deal comes at a time of uncertainty for the country following the impact of COVID-19, but Dave adds that, “Despite the difficulties we are all facing at this time, we continue to keep our residents at the heart of what we do, maintaining essential services and proactively contacting 15,000 elderly or vulnerable residents, making welfare calls and ensuring that our residents have their basic needs met.
As Together Housing begin to focus on their recovery strategy coming out of lockdown, they are in a strong financial position to focus on achieving their corporate ambitions, by re-starting investment works on existing assets, continuing to build new homes for sale and rent and carrying out essential improvement works to lower their carbon emissions.
Together Housing was supported by Savills Affordable Housing Valuation Team to finalise the £100m tap on its existing bond.
Anne Johnson, Head of Affordable Housing Valuations at Savills, said:
“We were very happy to be part of the team that delivered the deal in this challenging market, and enable Together Housing to take advantage of the low rate environment.”
Together Housing’s legal advisers were Devonshire’s and the funders legal advisers were Addleshaw Goddard.
BDO LLP provided reporting accounting services to Together and Barclays.
Barclays led on the transaction. Matt Thomas, Head of UK Corporate DCM at Barclays said,
“Barclays is proud to have led this £100m transaction, supporting Together to access further long-term financing at an attractive price and yield.”