West Midlands landlord issues £140m bond

The landlord issued £200m of the existing bonds in December 2012 and a further £100m in January 2020. Bonds worth £40m that were originally retained have been cancelled.

Gary Booth, chief financial officer at Citizen, said: “We have engaged with NatWest on this transaction, who have issued bonds of £140m (£70m now and £70m retained for us to use over the next three years).

“This bond issue is part of our funding strategy to support the investment in building new affordable homes across the West Midlands. At Citizen we are committed to building homes to meet the needs of our region.”

Citizen, currently rated A3 by Moody’s, said the new bonds were expected to be graded A3 by the credit rating agency as well. The bookrunner for the issuance was NatWest Markets and the transaction was supported by Savills Financial Consultants and Trowers & Hamlins.

Last month, the social landlord reported that it had stopped including major repairs in its earnings before interest, tax, depreciation and amortisation (EBITDA) loan covenant for bank and building society debt from 2023-24 onwards.

Citizen developed 653 new social and affordable homes in 2023-24, plus 50 for outright sale, which it said was the largest development programme it had “ever achieved in a single year”.

Earlier this year, Inside Housing reported that there had been a flurry of new issuances that perhaps pointed to renewed interest in the housing association bond market after the effects of the Mini Budget in 2022.

In January, Sovereign Network Group (SNG) raised £400m via a 33-year bond, while Platform Housing Group issued a 26-year bond for £250m.

At the start of the month, Notting Hill Genesis was forced to temporarily suspend trading for five of its bonds after delaying the publication of its audited annual accounts.