Clarion in record-breaking sustainable bond issue

Group raises £350m through heavily over-subscribed 15-year bond.

 

Housing and money

Clarion Housing Group has raised £350m in a bond issue that breaks the record for the lowest interest rate for a primary bond issuance by a housing association.

The 15-year bond was priced at an all-in effective rate of 1.88% and was heavily oversubscribed, attracting £1.3bn from well over 100 orders, including significant demand from European investors.

Demand for the bond was strengthened by Clarion’s  commitment to environmental, social, and governance issues (ESG).

In November 2019, this commitment was recognised when Clarion became the first housing association in the UK to be accredited with the pan-European Certified Sustainable Housing Label.

“We are delighted by the record breaking performance of this bond, which is a vote of confidence in the strategic direction of Clarion Housing Group,” said CFO Mark Hattersley.

“This backing in the market will underpin our plans to scale up delivery of new homes.”

The successful bond issue follows half year results in which the group confirmed it had completed a record number of new homes in the first six months of the financial year and increased investment on existing homes to £92m.

Gareth Francis, director of treasury and corporate finance, said: “Once again, our issuing framework allowed us to act quickly and take advantage of a good market opportunity.

“However, our ESG credentials also had a very significant part to play, particularly in garnering such wide interest.

“This reinforces our belief that a positive sustainability story would attract new funding sources.

“We hope that this issue builds momentum for the sector, increasing cost-effective investment in housing associations – and pushing the sustainability agenda further forward.”

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