TradeRisks advises on £120 million deferred bond
TradeRisks Limited, the corporate finance firm that provides specialist advice to housing associations, local authorities and other providers of social infrastructure, has advised, arranged and placed a £120 million listed bond maturing in 2057. The bond has been issued by Yarlington Housing Group, the housing provider focused on the south west of England, which has sold £60 million to an institutional investor and retained £60 million for future sale.
The bonds were rated A2 by Moody’s Investor Services and the £60 million of bonds subscribed for provide Yarlington with £1.14 million on settlement and the remainder in equal annual instalments up to 2020. The coupon of the bonds was agreed at 3.41%, which takes into account the deferred payment profile, and the £60 million sold were sold at par, giving Yarlington certainty of the cost of this committed funding.
Yarlington will use the funding to help deliver its Next-Gen corporate strategy commitments, aimed at delivering solutions to the UK housing crisis, in the coming years.
Antoine Pesenti, Managing Director at TradeRisks, said “The deferred funding structure of this bond provides Yarlington with certainty over the availability and cost of their funding for the coming years, whilst mitigating the cost of carry. We are pleased to have delivered on this transaction for Yarlington, demonstrating again that by approaching the market in a considered way it is possible to secure attractive and well-tailored funding solutions.”
On the result, Yarlington’s CEO, Gary Orr said: “We are delighted to have secured this additional long-term funding. The bond issue, and our financial results, places Yarlington in a strong and secure position to deliver our ambitious commitments set out in our Next-Gen corporate strategy. It reflects the confidence by the capital markets in Yarlington’s strategic and financial plans. Underpinned by our strong governance, consistent operating margins and dedicated staff, this financing arrangement will play a major role in delivering our strategy, at a time when affordable housing is needed across the south west.”
Allen Twyning, Head of Debt Origination at Pension Insurance Corporation who subscribed to the bonds, said: “We are very pleased to have worked with Yarlington Housing Group on this transaction. The investment provides an attractive risk profile in an area of high demand for social housing. In addition the maturity profile is well-suited to our liabilities. The team at Yarlington impressed us with its expertise, knowledge and strong governance and we are delighted to continue our commitment to supporting social and affordable housing.”
For further information please contact Antoine Pesenti on +44 (0) 20 7382 0906 or