Stonewater has successfully issued a £250m sustainability bond that will support its plans to deliver 6,250 homes by March 2024.
The sustainability bond, which was issued using Stonewater’s newly established Note Programme and is ESG-accredited, will also help meet other key targets and strategies to reduce net carbon emissions and support Stonewater’s social impact.
Working alongside Guinness, Stonewater has also just been named by Homes England as one of its largest strategic partners.
As well as supporting Stonewater’s development programme, the 15-year bond has re-established Stonewater’s presence in the public capital markets and was issued at 85bps over gilts (the cost of government debt), giving an all-in rate of 1.749%.
John Bruton, Deputy Chief Executive and Executive Director of Finance at Stonewater, said: “We are delighted to secure this new bond funding on such favourable terms. Despite the challenging backdrop of the pandemic, we have taken significant steps in the past 12 months to refine our financial approach and ensure our organisation continues to support customers and meet housing needs.
“In addition to being at the forefront in publishing a Sustainable Finance Framework aligned with United Nations’ Sustainable Development Goals, we have also launched our EMTN programme.
“This makes it more straightforward to raise funds and places us on a firm footing to work with our funding partners to deliver on our commitments to customers in the years to come.”
Katie Farrell, Assistant Director, Rothschild & Co, said: “Stonewater’s debut sustainable bond issue completes another major funding milestone following the group’s recent organisational restructure, the publication of its Sustainable Finance Framework and the establishment of its EMTN programme. It has been a pleasure working with the Stonewater team again in helping deliver these important milestone projects.”
George Flynn, Debt & Financing Solutions, NatWest, said: “NatWest is delighted to have supported Stonewater through this exciting journey as its sole ESG structuring bank, sole arranger of the recently established Note Programme and joint lead manager of the highly successful sustainability bond issuance.
“The management team captured investors’ attention and showcased the organisation’s sustainability credentials through the marketing phase, which resulted in strong over-subscription.
“This transaction has firmly re-established Stonewater in the public bond market and the result achieved is testament to the credit strength of the organisation and will support the construction of high-quality, affordable housing across England.”
Julian Barker, Head of Banking and Capital Markets, Devonshires, said: “We are delighted to have advised the Stonewater team on this deal and the wider EMTN Programme. The fantastic pricing and significant level of investor interest both show that investor appetite continues to be buoyant in the social housing sector and reflect the quality of Stonewater as a business.”