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Accent issues £350m debut bond at record low interest rate
Accent Housing has issued £350m worth of bonds at a record low interest rate in its first ever trip to the capital markets.
The 20,500-home housing association borrowed the money over 30 years, at a cost of 1.3% more expensive than the cost of equivalent government borrowing.
Overall, the interest rate was 2.625%, which Accent said is a new record for a bond greater than 12 years in maturity within the UK social housing sector.
The association, which manages homes in the North, East and South of England, said it will use the money to fund its plans to build 2,000 new affordable homes over the next five years. It will also use the money to repay some of its bank debt and invest the remainder in existing homes.
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Accent pitched the bond to 40 investors in Edinburgh and London during its roadshow, resulting in an order book of more than £1.3bn, 5.8 times oversubscribed. Accent has taken £225m of it immediately, retaining £125m to access at a later date.
Paul Dolan, chief executive of Accent, said this was “a brilliant outcome”.
He added: “This is the culmination of two years of hard work by the Accent team to reset the organisation’s corporate strategy, governance arrangements and operating model.
“Investor feedback was very positive about the coherence of our corporate strategy, current operating performance and our ability to effectively manage the Accent business over a national footprint.”
David Royston, executive director of finance and ICT at Accent, said: “Throughout the refinancing processes we have worked closely with our existing lenders, who have continued to be very supportive by providing additional new facilities to the organisation as well as invaluable market insight and advice.”
Andy Smith, director of affordable housing valuations at Savills, added: “We were very happy to be part of the team that delivered this significant own-named bond, which will enable Accent Housing to both deliver new homes and invest in its existing stock.”
Barclays, Lloyds Bank Corporate Markets and NatWest Markets were bookrunners on the deal, with Allen & Overy providing legal advice.
Dominic Brindley, head of public sector at NatWest Markets, said: “The significant oversubscription and tight pricing is a testament to the organisation and performance on the roadshow as well as a glowing reference of the Accent credit story. This bodes exceptionally well for future supply in the social housing market.”
