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Hyde Housing has announced the issuance of a 35 year, £400m bond, which includes a £50m retained element, at a coupon of 1.75% and issuance credit spread of 130 basis points over gilts.
The coupon of 1.75% is one of the lowest rates ever achieved in the long-dated sterling bond market in the sector.
The bond was launched with initial pricing guidance of 145 basis points, but exceptional demand from investors helped the lead banks on the transaction, Barclays, HSBC and NatWest Markets, to lower this to a final pricing level of 130 basis points.
The issuance was made to "refinance other long-term facilities, which will significantly reduce overall interest payable going forward and therefore strengthen interest cover and credit rating metrics on a long-term basis."
The £50m retained portion of the bonds issued may be used for further refinancing and/or investment requirements as appropriate.
Standard & Poor’s has assigned an A (stable) credit rating to the bonds, which was based on Hyde’s annual rating review as updated on 24 July 2020 and affirmed as unchanged. Fitch has also assigned an A+ (negative) rating to the bond.
Rod Holdsworth, Chief Financial & Resources Officer, said: “This is an excellent outcome for Hyde and I would like to thank everyone involved. The savings we will make on interest payments put us in a great position to deliver on the aspirations we set out in our strategic plan 2050 and ultimately, to build more homes for people who need them.”