Accent Group has priced a £225m public bond at a coupon rate of 2.625%, with a further £125m retained for future sale.
The 30‐year listed bond marks the first for Accent and is the lowest ever coupon for a bond greater than 12 years within the sector.
The group has pitched a development of 2,000 new, affordable homes over the next five years, as well as the repayment of some existing bank debt.
What’s left will be invested in existing homes and in providing transformational services for Accent’s customers.
A roadshow that pitched to 40 investors in both Edinburgh and London generated exceptional interest, with the bond attracting a peak order book in excess of £1.3bn – 5.8 times oversubscribed – resulting in a spread of only 130bps over Gilts.
“To have achieved a deal on our debut bond issuance with a final order book of £1.3bn and the lowest HA coupon for a bond greater than 12 years ever is a brilliant outcome,” said group CEO Paul Dolan.
“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 business over a national footprint.
“We will now continue to focus on our plans for sustainable growth and our ultimate aim of delivering a customer experience that is sector leading,” he said.
The issue comes after credit ratings agency Standard & Poor’s assigned Accent Capital plc its A+ longterm issuer credit rating on 4th July 2019.
Throughout the refinancing processes, Accent worked closely with its existing lenders who have continued to provide additional new facilities as well as market insight and advice.
Barclays, Lloyds Bank Corporate Markets plc, and NatWest Markets were bookrunners on the deal, supported by Allen & Overy in respect of legal advice.
Accent’s legal advisor on the transaction was Trowers & Hamlins.