Blend raises £100m for two borrowers in sector’s first deferred deal by an aggregator

Blend’s deputy treasurer Will Stevenson said that the pricing was “at least 25 bps inside current typical private placement levels, demonstrating Blend’s ability to secure competitive rates of funding for its borrowers, even when innovating new products”.

The deal enabled West Midlands-based WHG, which has its own A3 (stable) rating from Moody’s, to access funding under Blend’s A2 issuer rating. Cobalt, which manages homes across north Liverpool, has a private credit rating with Moody’s.

Piers Williamson, chief executive of Blend and THFC, said the deal marks a “significant development for the sector”, in response to growing appetite for deferred drawdown.

He added: “With no foreseeable easing of political and COVID-related uncertainty, we know that deferred drawdown can provide a buttress for HAs’ business plans and mitigate funding risk and carry costs, so the sector can continue with their commitment to build even more badly needed affordable homes.

“Today’s transaction adds a significant competitive alternative to private placements. We believe it’s the first time an aggregator has issued public bonds on a deferred drawdown basis, but for the sake of the sector we’re confident it won’t be the last.”

Richard Nowell, treasury manager at WHG, said: “This funding will help WHG realise our ambitious growth strategy to expand the services offered to our customers and build new affordable homes across our communities in the Midlands.

“The inclusion of deferred drawdown under the Blend model means WHG can take advantage of current market conditions to secure the funding we need in the future, and is a positive development for the affordable housing sector.”

Jon Webster, director of resources at Cobalt Housing, said “The Blend team have been incredibly responsive to our interest in deferred drawdown, and today achieved this at a great rate. This secures deferred long term funding to support our business plan, deliver quality affordable housing for our residents, as well as new homes across our neighbourhoods.”

In August, Blend tapped its 2047 bond for a £38m loan to two housing association borrowers – Leeds Federated Housing Association and Ateb Group – at an all-in rate of 1.97 per cent.