The Hightown Housing Association Retail Charity Bond has raised £31.5 million and closed early due to high demand.
The funds will be used to support Hightown’s development programme. The Herts-based housing association expects to build over 1,000 homes in the next two years, 75% of which will be for social, affordable or intermediate rent.
The bond offer was launched on 10 October and scheduled to close on 24 October, but was closed early on 16 October after strong demand from investors. The bonds will pay a fixed rate of interest of 4% a year and will mature in 2027. Hightown will borrow £31.5m initially when the bonds are issued on 31 October, but a further £6.5m of ‘retained bonds’ will be created which can be sold and the extra money loaned to Hightown at a later date.
This is the second bond for Hightown issued through Allia’s Retail Charity Bonds platform, which provides charitable borrowers with affordable access to the retail bond market. Hightown was among the first users of the platform, raising £27m through a Retail Charity Bond in 2015.
David Bogle, Chief Executive of Hightown, said:
“We embarked on this funding route as it presents an opportunity for ethically-minded investors to contribute to the delivery of much-needed affordable homes. Once again, the early closure of the Retail Charity Bond underlines the value of building the affordable homes that our region so desperately needs.”
Phil Caroe, Director of Social Finance at Allia, said:
“This latest successful Retail Charity Bond issue confirms both the market’s confidence in Hightown and its appetite for investments offering a positive social impact. With three successful Retail Charity Bond issues this year totalling nearly £90m, the retail bond market continues to offer an attractive source of unsecured loan finance for housing associations and other charitable borrowers.”
Henrietta Podd of the JCRA - Peel Hunt Debt Capital Markets team said:
“The Retail Charity Bonds platform was set up to simplify access to the capital markets for strong charities like Hightown. Their second 10 year unsecured bond, with a lower coupon and including a retained bond facility for future funding, demonstrates the efficiency and effectiveness of the platform.”
Since 2009, Hightown has built over 460 homes in Hemel Hempstead and will build a further 450 in the next five years. Hightown’s flagship development in Maylands Avenue will deliver 130 new homes transforming the local area as it opens this autumn.
Hightown remains committed to providing homes to those in most in need by supporting up to 820 users at any one time across dedicated support schemes ranging from homeless night shelters to blocks of individual flats with staff on the premises to registered care homes.
Over 80% of staff work in the housing association’s dedicated care and support team, delivering over 30,000 support hours per week for vulnerable and disabled people.