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The Hyde Group Makes History With Innovative New Benchmark Housing Association Bond

Planning approvals edge higher on last year
Written by Amy

The Hyde Group (“Hyde”) has made history by issuing an oversubscribed bond for £400m. This is believed to be largest long-term bond at the lowest coupon ever raised by a housing association group and used an innovative funding strategy. The bond was issued by Martlet Homes, a core Hyde subsidiary focussed on providing affordable homes in the South East.

The transaction further strengthens the Group’ financial position and provides the organisation with additional capital to continue to improve services, and build 6,000 new homes in the region over the next five years. Hyde’s fundamental desire is to play a significant role in helping to solve the chronic housing shortage in London and the South East.

Hyde’s Chief Executive, Elaine Bailey, said: “Our purpose as a housing association is to provide a place to live for as many people left behind by the market as possible. The housing crisis in London and the South East of England is a huge and longstanding problem, which will only be solved if we all play our part and this deal demonstrates that Hyde is serious about creating more than our fair share of new homes the region needs.”

The 35-year issue was greeted with strong demand from investors. It was given a credit rating of A+ by Standard and Poor’s and achieved a coupon of 3%. Book runners for the deal were Barclays and Lloyds.

Peter Denton, Group Finance Director, who joined Hyde earlier this year, said: “This excellent deal clearly demonstrates Hyde’s commitment to ensuring it optimises its financial strength to deliver our social purpose of providing homes for those who otherwise would not have one. Martlet is a fantastically strong association in its own right and by issuing through this subsidiary we initiated a public bond programme via a very transparent effectively ring fenced entity. ”

Jeremy Froud of Barclays said: “This issue allows Hyde and Martlet to implement the next stage of its strategy, including the provision of affordable needs housing to people seeking a home in London and the south east of England. The strength of Martlet as an issuer has been recognised and accepted by fixed income investors.”

Grant Vaughan of Lloyds Bank said: “In terms of long-dated funding from the sector, this not only represents the largest single tranche of debt raised, but also the lowest coupon. To achieve this in the current climate is an impressive feat and testament to the strength of Martlet and its management.”

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Amy