Inside Housing – Home – Large landlord raises £400m in bond market debut

News06.12.22by James WilmoreGreenSquareAccord (GSA) has raised £400m through the bond markets to help it refinance existing debt, invest in its housing stock and build new homes. Picture: Getty SharelinesGreenSquareAccord raised £400m through the bond markets to refinance debt, invest in its housing stock and build new homes #UKhousing The deal marks the first public bond secured by the 25,000-home landlord since it was formed in April last year through the merger of GreenSquare and Accord.
The group issued the 25-year bond at a coupon of 5.25% under its new sustainable finance framework, with £100m retained. 
The bond was launched at an initial guide price of 235 basis points over gilts, but GSA said demand drove this down to 210 basis points.
Additionally, the all-in cost of funds was 5.396%. 
In total, 29 investors participated in the fundraising, the vast majority from the UK. 
It is the first fundraising through the bond markets by a housing association in a number of months, amid the uncertain economic climate.  Jo Makinson, GSA’s chief finance officer, said: “This bond gives us long-term assurance and certainty of cost in an increasingly volatile and unpredictable market.” 
In its first funding deal last year, GSA secured £75m through a 40-year bond with aggregator Blend. 
Once it has completed a refinancing exercise, off the back of the latest deal, GSA will have total debt of around £1.4bn, with around £1bn of this drawn debt, a spokesperson told Inside Housing. In its first full year as a merged group, GSA reported a surplus of £198.3m due to a gift of £218m from the merger accounting. However, on an underlying basis, the group had a deficit of £19.7m off a turnover of £210.6m, which its chair, Robin Bailey, branded “disappointing”. 
In October last year, GSA breached the regulator’s Home Standard after it was found that hundreds of its homes did not have a current fire risk assessment and more than 10,000 had never had an electrical inspection. 
The landlord, which manages homes across the Midlands and South West, currently has a G2/V2 rating with the regulator. It was downgraded to G2 in October last year. 
Update: at 6.57pm, 06.12.22
An earlier version of this story wrongly stated that GSA had total debt of £2.4bn.



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