Four HAs receive split of £250m through government-backed scheme to build over 1,500 homes

ARA Venn, which manages the scheme, said the interest rate on the loans of 4.82 per cent “reflects the competitive pricing achieved under AHGS, highlighting its benefits to the sector”.

The bond issuance, which is guaranteed by the UK government, achieved an “attractive spread” of 55 basis points over gilts, it said. The reference gilt is the UKT 0.875 per cent due July 2033.

There were around 15 investors for the deal, for which the credit rating was Aa3, from Moody’s. HSBC Bank, NatWest Markets and RBC Europe acted as joint lead managers and book runners.

This is the new issuance under the AHGS since Torus, Stonewater and Coastline Housing accessed £250m from a £350m bond in March this year. The remaining £100m was retained. 

ARA Venn said: “With many housing associations expressing a preference for shorter tenors recently, this new 10-year maturity demonstrates the scheme’s flexibility and ability to adapt to meet borrowers’ requirements. Complementing the existing 30-year tenor bond available under the scheme, this gives borrowers options on loan maturity whilst benefiting from AHGS’s competitive pricing.”

Oriane Auzanneau, deputy portfolio manager for the AHGS and managing director at ARA Venn, said: “We are delighted to be able to support our borrowers with the delivery of their affordable development pipelines, bringing over 1,500 much-needed new homes to their local communities.

“It is great to now be able to offer 10-year funding under this new bond series, which was developed to support those borrowers expressing a preference for shorter maturities. Borrowers accessing funding under AHGS now have more options available to meet their treasury requirements whilst taking advantage of the competitive pricing of the scheme.”

Naomi Dobraszczyc, director of finance and resources at NCHA, said: “At NCHA we are developing 1,850 homes over the next five years. We remain committed to providing more affordable homes for our communities across the East Midlands, to help fulfil an ever-growing need during the cost of living crisis.

“This is NCHA’s second round of funding via the AHGS scheme. Our main driver for returning was the excellent value we know we can rely on. And, as a repeat borrower, we benefited from a streamlined application process.”

Jane Castor, chief finance officer at Thirteen Group, said: “As a strategic partner to Homes England with an ambitious development programme over the next five years, we are pleased to have secured funding to support the financially viable delivery of high-quality and modern homes in our communities.”

Paul Richmond, deputy chief executive at Watford Community Housing, said: “We are delighted to be working with ARA Venn in securing a second round of funding with them following the success of our first funding round in November 2021.

“This additional funding round provides value for money to Watford Community Housing, and it will help us deliver on our growth aspirations in South West Hertfordshire. We are committed to sustainable growth, delivering much-needed new homes and enhancing our local community areas.”

Rob Parkes, director of finance at Yorkshire Housing, said: “We’re delighted with the outcome of this deal and with the support we received from ARA Venn throughout. They were open to our ask of a 10-year maturity, which allowed us to take advantage of the dip in the gilt curve and also worked with the profile of the rest of our funding portfolio.

“With thousands of families on housing waiting lists and the cost of living still high, it’s more important than ever to provide affordable homes across Yorkshire.

“This new funding is a positive step forward for Yorkshire Housing and the wider sector, enabling us to deliver on our plans to provide more affordable homes for people across Yorkshire.”

Macfarlanes worked as the issuer’s legal advisor and A&O as the investors’ legal advisor.