A Wilshire-headquartered housing affiliation has priced its first £250m sustainability bond with the proceeds bolstering its fund for growing new reasonably priced properties.
Headquartered in Devizes, Aster owns and manages greater than 30,000 properties throughout the south of England. It’s investing in extra of £2bn over seven years in new properties.
Underneath the group’s new European medium-term notes (EMTN) programme, the 15-year sustainability bond, which was 4 occasions oversubscribed, comprised £200m instant funding and an extra £50m retained.
The group, which holds an A+ (steady) credit standing from Customary & Poor’s, stated the bond can be used to fund the development of recent vitality environment friendly properties for reasonably priced and social lease and shared possession.
The bond priced at a diffusion of Gilts 80bps, with an all-in price of 1.4 per cent, and attracted buyers that haven’t beforehand invested in Aster.
Chris Benn, group finance director at Aster Group, stated: “Buyers are more and more looking for to fund companies that function in an moral manner and assist to construct a greater society.
“This bond offers us additional funding for our inexperienced reasonably priced programme, so we are able to present extra of the properties required to satisfy the UK’s housing want – notably in our south of England heartland, one of the crucial costly housing markets in Britain.
“We’re more than happy to safe such aggressive pricing and appeal to new buyers to Aster to assist our drive to be a extra sustainable enterprise.
“The bond proceeds complement our funding from different sources that collectively make up our diversified and prudent funding technique.”
Lloyds Financial institution and Barclays acted as bookrunners on the bond placement.
Kirsty Garrett, director in Lloyds Financial institution’s Debt Capital Markets group, stated: “The Lloyds group was delighted to work with Aster to efficiently concern its debut sustainability bond, off the newly established EMTN programme.
“The investor engagement all through the roadshow and execution section is a testomony to the standard of the Aster administration group.
“The transaction welcomed quite a few new buyers, attracted by Aster’s credit score power and clear ESG focus at its core.
“The deal marks solely the third ever Sustainability Bond issued by a housing affiliation and paves the way in which for extra to observe. With a various, rising investor base and its EMTN Programme, Aster is well-positioned to effectively return to the bond markets sooner or later.”
Matt Thomas, head of UK Company DCM at Barclays, added: “Barclays is proud to have supported Aster on an extremely profitable return to the capital markets.
“Buyers absolutely embraced Aster’s sustainable finance technique and recognised and rewarded the management proven.
“The transaction, priced off a newly established EMTN Programme and Framework for Sustainable Finance, delivers not solely a robust preliminary pricing and demand end result but additionally ensures Aster has established a sustainable issuance platform for the longer term.”