Wednesday, October 20, 2021
Real EstateUK

Aster secures £250m in sector’s third sustainability bond

Sustainability bonds

The 15-year bond comprised £200m immediate funding and a further £50m retained

Aster Group has issued the sector’s third sustainability bond, securing £250m at an all-in rate of 1.4%.

The 30,000-home landlord, which operates across the South of England, priced the bond via its new European Medium-Term Notes (EMTN) programme. The proceeds will go towards the construction of new energy-efficient homes for affordable and social rent and shared ownership.

The 15-year bond, which was four times oversubscribed, comprised £200m immediate funding and a further £50m retained.

It priced at a spread of 80 basis points (bps) over gilts, the government cost of borrowing.

Previous sustainability bonds, both issued by Clarion Housing Group, include a £350m 15-year bond with an all-in rate of 1.88% and 98 bps over gilts and a £300m 12-year bond with a spread of 95 bps over gilts and a coupon of 1.25%.

Sustainability bonds require the finance raised to be used exclusively for green or social projects.

Chris Benn, group finance director at Aster, said: This bond gives us further funding for our green affordable programme, so we can provide more of the homes required to meet the UK’s housing need – particularly in our South of England heartland, one of the most expensive housing markets in Britain.

We’re very pleased to secure such competitive pricing and attract new investors to Aster to support our drive to be a more sustainable business, he said.

The transaction, arranged by Lloyds Bank and Barclays, attracted new investors to Aster and will support its aim to spend £2bn over seven years on new homes.

Kirsty Garrett, director of the debt capital markets team at Lloyds Bank, said new investors were attracted to Aster’s sustainable focus and strong credit rating of A+ (stable) from Standard & Poor’s.

Important:

The articles are for information purposes only and Invest for Property shall not be held responsible for any errors, omissions or inaccuracies within it. Any rules or regulations mentioned within the website are those relevant at the time of publication and may not be the most up-to-date.

Invest for Property does not endorse any of the products or services that appear on it or are linked to it and are not liable for any action that you may take as a result of the content of this website, or losses or damage you may incur doing so.

There is no obligation to purchase anything but, if you decide to do so, you are strongly advised to consult a professional adviser before making any investment decisions.

Please remember that investments of any type may rise or fall and past performance does not guarantee future performance in respect of income or capital growth; you may not get back the amount you invested.

Leave a Reply

four × 2 =