Circle’s bond sees considerable oversubscription
Circle issue £250 million Secured Bonds Due 2044
Circle, the UK’s third largest provider of affordable housing, has today launched and priced a £250 million fixed rate bond through its capital markets issuance vehicle Circle Anglia Social Housing PLC. The issue attracted significant investor interest and was more than three times oversubscribed. Receiving 29 firm orders, the strength of the issue has brought in a number of new investors to the sector and is a huge vote of confidence in both Circle and UK Affordable Housing.
With a spread of 198 basis points and yield of 5.22%, the bonds are rated Aa3 by Moody’s Investor Service. The bonds were issued by joint book runners Deutsche Bank and Santander and were arranged by TradeRisks.
Circle has almost half of its homes in London and has had demonstrable success in integrating stock transfers and new housing associations into the group. Circle has also improved its efficiency as well as achieving high and increasing levels of customer satisfaction. This improved performance, together with no reliance on property sales, was recognised by Moody’s which recently enhanced Circle’s Aa3 status with an improved risk rating.
The bond positively builds on Circle’s 2008 bond issue which raised £275 million at a yield of 7.25% and its 2010 bond tap which raised a further £124 million at a yield of 5.39%. Circle’s financial strength has been significantly improved, adding an extra £250million to its £400million of available liquidity.
The launch of the deal means that Circle’s business plan is now fully funded for over ten years through committed long term facilities and demonstrates investors' continued appetite for the UK housing sector.
Calum Mercer, Executive Director of Finance at Circle, said:
“We are pleased to have secured additional long term funding for Circle, the overwhelming level of investor appetite demonstrates confidence in the sector and confidence in our ability to deliver on our commitments and plans. Investors have recognised our strong track record in delivering improved financial performance, improved customer service and our success in integrating new partners into the Group.
“Our core purpose is to invest in people and their communities and to enhance life chances. We work closely with our residents to create safer, stronger communities over the longer term, focusing on ensuring our residents have access to financial advice and support, training, education and employment opportunities. We are also planning wide scale investment in affordable warmth, to help residents bring down energy bills.”
Conor Hennebry, Director in Capital Markets & Treasury Solutions at Deutsche Bank said:
"Deutsche Bank is delighted to have partnered with Circle on this highly successful bond issue. Circle has attracted in new investors and achieved a great price. We congratulate everyone in Circle on this vote of confidence from the capital markets and look forward to more successful financings in the future."
For more information please contact Kimberley Rowley on 0207 288 4084 or email kimberley.rowley@circle.org.uk
24/02/12 11:04
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