Great Places plans £145m bond raise with tap of 2012 issuance

The transaction is set to be a tap on a £200m bond that came to market in 2012.

The new money, £70m of which will be retained, will take the 19,000 home, Manchester-based landlord’s total issuance since 2012 passed the £250m index-bond benchmark, potentially giving it access to a wider range of funders.

“Getting to the benchmark level makes the bond more marketable,” executive director of finance Phil Elvy told Social Housing.

“We already have the relationships with investors and the market, so the decision [to issue a bond] was relatively straightforward.”

Great Places’ 2012 debut bond included a £50m retained portion, which was sold in two £25m issues in 2013 and 2014. The latter went for 102 basis points over gilts.

The latest bonds, which will be used mainly to fund new development, are due to be priced on Monday.

Mr Elvy said that Great Places would take pricing guidance from Optivo’s bond issue, which has been roadshowed this week and is expected to price today (Thursday).

Great Places was given an A3 rating by Moody’s this week, one notch below the rating given to Optivo.

The bookrunner for Great Places is Santander, while treasury adviser is Link Asset Services.

Legal adviser to the issuer is Devonshires, with Allen & Overy providing legal advice to investors. Prudential is security trustee.

Moody’s said the issuer rating reflects Great Places’ "ample liquidity and improved operating performance, in addition to the strong regulatory framework governing English Housing Associations".

The agency said it also incorporates the view of the HA’s "increasing exposure to market sales and weakening of interest coverage ratios".

The majority of properties used for security are valued at market value subject to tenancies (MV-ST) at an asset-coverage ratio of 1.15x, according to Moody’s.