Platform issues 26-year sustainability bond, at 83bps over gilts

The issuance, made on 3 April, continues a trend of housing associations returning to the capital markets to issue longer-term debt. The September 2022 Mini Budget sent shockwaves across the markets, with housing association issuances remaining quiet last year.

Issuance in the current calendar year was kickstarted in January with a £400m, 33-year sustainable bond from Sovereign Network Group pricing at 108bps over gilts. Last month, Paradigm followed with a slightly shorter tenor, issuing 20-year bonds at 87bps over gilts, in £250m of sustainable issuance.

Platform’s bonds were issued from the group’s £1bn EMTN programme. It was established in 2021 along with its sustainable finance framework, from which it issued its first labelled bond in September of the same year.

The all-in cost of funds on the latest deal was 5.36 per cent, after bookrunner fees. It is priced over the 0.625 per cent gilt, due 22 October 2050, on which the yield was 4.512 per cent.

The bookrunners on the transaction were Lloyds Bank Corporate Markets, Barclays and National Australia Bank. 

Legal counsel was from Bevan Brittan and Addleshaw Goddard, with JLL and Avison Young providing security valuations.

Platform said that, in accordance with its sustainable finance framework, the proceeds would be used to fund the development of homes that are ‘green buildings’ (having an Energy Performance Certificate rating of Band A or B), and affordable.

Rosemary Farrar, chief financial officer at Platform, said: “We are incredibly pleased that our debt investors recognise the huge attractiveness of the social housing sector and continue to support funding the excellent projects we invest in. 

“These investments help to make significant social and environmental improvements to the communities in which we operate, as we push ahead with our ambitious development and decarbonisation strategies.”

Jessica Friend, Platform’s group corporate finance director, said: “The strong performance of this issue is supported by our ongoing engagement with the debt investor community and reflects Platform’s focus on balancing investment with maintaining financial strength.”

The issuance comes two months after the group secured £275m in sustainability-linked revolving credit facilities (RCFs) from ABN AMRO Bank and National Australia Bank to help it develop new affordable housing and decarbonise its existing portfolio.

Ben Colyer, the housing provider’s corporate treasury director, said the public bonds would complement these RCFs, adding: “[It] means that just under half of Platform’s £2.2bn debt portfolio is now explicitly supporting our sustainability objectives.” 

Update: at 9.44am, 11.04.24

The article was updated to include details of the all-in cost of funds and the reference gilt.

Hear from Rosemary Farrar at the Social Housing Finance Conference, which is taking place on 8 May in London. Ms Farrar will be speaking in a session entitled ‘Keeping compliant with incoming legislative and regulatory requirements – the financial and practical implications for your organisation’. Fellow panellists include Sheron Carter, chief executive of Hexagon. For more information about the event, and remaining tickets, click here.