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Optivo sells £100m of retained bonds

News27 Aug 2021Sarah Williams

Large London association Optivo has sold £100m of retained 2035 bonds, with a coupon of 2.857 per cent.

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Large London association Optivo has sold £100m of retained 2035 bonds, with a coupon of 2.857 per cent #UKhousing #SocialHousingFinance

The bonds were retained during a transaction early last April, when Optivo became the first corporate issuing sterling public bonds to brave the markets following the turbulence created by the COVID-19 pandemic.

 

That issuance – which came at length after an investor roadshow nearly a month before, as uncertainty reigned – priced at 230 basis points over gilts, with an all-in yield of 2.857 per cent.

 

Optivo accessed £150m of the £250m total issuance at the time, with the remaining portion saved for future use.

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Last week’s sale of the retained element, in which the borrower was supported by Barclays, sees all £250m of the bonds now in circulation. The spread and yield on the retained sale were not disclosed.

 

The proceeds of the £100m will be used for general corporate purposes, according to the 43,000-home association.

 

The fundraising comes after Optivo warned that it now expects to spend more than £250m on fire safety over the next 10 years, as it posted its annual results for the year to March 2021.

 

“Our estimates reflect our current understanding of fire safety regulation, but the scope of works and costs may change,” the report said.

The provider’s post-tax surplus for the year came in at £90.3m for the year, up fivefold on £18m the prior year.

 

However it benefited from significant gains on the movement in fair value of its financial instruments and investment properties.

FinanceHousing Association/RPLondonSouth East
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