Historic bond issue
In September 2008 Affinity Sutton
re-opened the bond market for individual housing associations with
the launch and pricing of a STG250m 30 year fixed rate secured bond
issue through its capital markets issuance vehicle Affinity Sutton
Capital Markets plc with a coupon of 5.981%.
The deal which was rated Aa2 by Moody’s
Investor Service was at the time the largest ever own-name bond
issued by a Registered Social Landlord (‘RSL’) and, as the first AA
rated secured corporate deal to emerge from the sector, avoids the
securitisation techniques used in earlier deals. The order book for
the deal was over-subscribed and the bonds were placed with
seventeen institutional investors.
The bonds are secured by assets and guarantees
given by the three main RSLs in the Group, Broomleigh, Downland and
William Sutton. The bond terms set a minimum level of asset cover
of 105% on an Existing Use Value (EUV) basis or 125% on a Market
Value Subject to Tenancies (MV-T) basis.
The degree of investor appetite for the
transaction reflected our financial strength and high credit rating
as well as the strong credit fundamentals of a sector underpinned
by effective regulation and enjoying significant capital and
revenue support from the UK Government. The deal was the first
major new issue from the RSL sector since the credit crunch
began.