Aggregator taps bond to provide £55m for two small housing associations

Alex Shelock, executive director of finance at B3Living, said the loan will be used to support the association’s “largest development to date” at Cheshunt Lakeside and support it to build more than 500 properties over the next three years, which is more than it has built over the past 30 years combined.

Chris Wyer, director of resources and growth at Orwell, said: “Through Blend we have been able to structure our loan to include spot and deferred elements which has allowed us to mitigate against inflation risk and build certainty into our development strategy. To lock in this rate for 30 years through Blend is a fantastic outcome for us and our tenants.”

The tap was four times oversubscribed and was priced at a spread of 113 basis points over gilts – the government cost of borrowing – giving an all-in fixed rate of 2.52%. This comes despite increased volatility in the market, with gilt yield rising ahead of an expected inflation rise in the coming months.

The transaction takes Blend’s overall outstanding loans over £1.2bn.

Piers Williamson, chief executive of Blend, said: “While the pandemic is far from behind us, it is apparent that we are entering the next stage of recovery and that the market is adjusting to this.

“Against this uncertainty Blend is well placed as an experienced issuer to continue to secure competitively priced funding for our borrowers.

“This transaction demonstrates the appetite in the sector for deferred drawdown products and Blend’s ability to innovate. To provide this even in a volatile market goes some way to explaining why even after 18 months of steady issuance our deal pipeline shows no sign of drying up.”