TradeRisks places £60m of Peabody debt at record low yield
Peabody has raised £60m through a bond placement at a yield of 3.94%, a spread of 95 basis points over the benchmark gilt.
The all-in cost of borrowing is the lowest ever in the sector for 30-year funding, and the lowest spread over gilts since the banking crisis. This compares with recent bond issues by Notting Hill and Affinity Sutton which were at spreads of 108 and 125 basis points respectively.
It is expected that other potential issuers will follow suit in the coming months to lock-in funding at historically low rates and take advantage of strong demand for social housing bonds.
Susan Hickey, Executive Director Finance of Peabody, commented: "For some time we have been closely monitoring market conditions with a view to an opportunistic bond placement. We are pleased to have been able to move quickly to identify investor appetite and execute a transaction when the opportunity presented itself. This has also allowed us to broaden the investor base for our bonds which will be helpful to future fundraising."
Alex Pilato, Chief Executive of TradeRisks, commented: "We are delighted to have secured a transaction for Peabody on competitive terms and following an opportunistic approach to placement which avoided the "new issue premium" and execution risk seen on syndicated bond issuance. We have worked extensively to bring new investors to this sector and are pleased to have supported Peabody in diversifying its investor base and forming relationships which will be of value to future transactions."
About Peabody
Peabody is one of London’s largest and oldest housing associations, set up by the American philanthropist George Peabody in 1862 to ‘alleviate the condition of the poor and needy of this great metropolis and to promote their comfort and happiness’. One hundred and fifty years on Peabody is thriving, with more than 20,000 homes on 219 estates, housing 55,000 people in 25 boroughs.
www.peabody.org.uk
About TradeRisks
TradeRisks Limited is an FCA regulated corporate finance firm providing independent advice, financing and risk management solutions to UK and international groups within the essential services, infrastructure and public sectors.
www.traderisks.com