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Aggregator refuses to confirm date of first issue
Social housing aggregator MORhomes has refused to confirm when it will issue its long-delayed first bond.
After launching its programme and starting roadshows with investors on 11 January, MORhomes was expected to issue the bond soon, but it has failed to materialise.
At the time, credit ratings agency Standard & Poor’s gave it an A- rating, which is below most of the housing associations it rates individually. In a statement on its website, MORhomes said that it was “notched down for being a ‘start-up’”.
Ordinarily, roadshows would last about a week before the bond was issued, but MORhomes’ roadshows started more than a month ago after it mandated Barclays, JP Morgan and Morgan Stanley to organise them.
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In the time that it has been speaking to investors about the issue, Futures Housing Group launched, roadshowed and issued a bond worth £200m.
And Notting Hill Genesis has issued a bond worth £250m. It told the market it planned to issue a £250m bond over a period of 15 to 20 years, saying it expected 11 of its 62 member housing associations to be involved in the issue.
These were A2Dominion South, Aster, Synergy, EMH Group, Hafod, Local Space, Melin, Heart of Medway, Charter, Tai Gwalia Cyf and South Yorkshire Housing Association.
Inside Housing understands that these 11 have signed confidentiality agreements, which mean they cannot talk publicly about the issue. However, one of them said that because of the delays, it was considering pulling out of the debut issue.
Patrick Symington, chief executive of MORhomes, said he was unable to comment on the deal as the marketing process is ongoing.
Work began on the aggregator in July 2017 and it hoped to issue its first bond in April or May 2018, with an original plan to issue £1bn worth of bonds.
This target has since been dropped to £250m, with the aggregator still aiming to issue £5bn worth of bonds over five years.
At the end of last year, due to the ongoing delays to the issue, MORhomes went back to its housing association shareholders to ask for more money to cover its running costs.
At the time, Neil Hadden, chair of MorHomes, told Inside Housing that the aggregator was waiting for the market to be “in the right state” and that it would be ready to go “early in the new year”.
