Housing provider raises £140m in London Stock Exchange retail bond first

Places for People has become the first UK social housing provider to issue a retail bond on the London Stock Exchange’s market for retail eligible bonds.

The provider raised more than £140m from the retail bond markets through its subsidiary Places for People Capital Markets PLC.

The bond will be issued on 27 June and will pay a fixed gross rate of interest of 5% per year until December 2016. It is expected to be rated Aa3 by Moody's Investors Service.

Places for People has raised money in the corporate bond market before and over the last ten years has raised more than £850 million in the UK and overseas debt capital markets.

It claimed that the launch of its retail bond “marked a turning point in the way the social housing sector is financed and a shift away from reliance on government funds”.

The organisation plans to use the proceeds to finance its future operations, capital expenditure and to refinance existing secured bank debt.

Steve Binks, Group Finance Director at Places for People, said: "We're delighted at the levels raised and the extent of over-subscription. We believe the success of the bond marks an important move towards a more creative and innovative financing structure for the housing association sector. It shows that there is a strong appetite for individual investment in a sector which has a good credit rating, stable cash flows, and strong financial viability."