top of page

£250m sustainability bond secured by housing association

Aster Group, a housing association with headquarters in Devizes, Wilshire, has priced its first £250 million sustainability bond with the revenues boosting its fund for the construction of new affordable homes.

Aster, headquartered in Devizes, owns and operates over 30,000 homes in the South of England. Over the last seven years, Aster has invested more than 2 billion pounds.

Under the group's latest European Medium-Term Notes (EMTN) programme, the four times oversubscribed 15-year sustainability bond included immediate funding of £200 million and held a further £50 million.

The group, which holds a Standard & Poor's A+ (stable) credit rating, said the bond would be used to finance the development of new energy-efficient homes for affordable and social rent and shared ownership.

The pricing of the bond at a spread of Glits 80 basis points and with an all-in cost of 1.4% resulted in an increasing number of new investors in Aster Group.

Chris Benn, group finance director at Aster Group, said: "Investors are increasingly seeking to fund businesses that operate in an ethical way and help to build a better society.

"This bond gives us further funding for our green affordable programme, so we can provide more of the homes required to meet the UK’s housing need – particularly in our south of England heartland, one of the most expensive housing markets in Britain.

"We’re very pleased to secure such competitive pricing and attract new investors to Aster to support our drive to be a more sustainable business.

"The bond proceeds complement our funding from other sources that together make up our diversified and prudent funding strategy."

Lloyds Bank and Barclays acted as bookrunners on the bond placement.

Kirsty Garrett, director of Lloyds Bank’s Debt Capital Markets team, said: "The Lloyds team was delighted to work with Aster to successfully issue its debut sustainability bond, of the newly established EMTN programme.

"The investor engagement throughout the roadshow and execution phase is a testament to the quality of the Aster management team.

"The transaction welcomed a number of new investors, attracted by Aster’s credit strength and clear ESG focus at its core.

"The deal marks only the third ever Sustainability Bond issued by a housing association and paves the way for more to follow. With a diverse, growing investor base and its EMTN Programme, Aster is well-positioned to efficiently return to the bond markets in the future."

Matt Thomas, head of UK Corporate DCM at Barclays, added: "Barclays is proud to have supported Aster on an incredibly successful return to the capital markets.

"Investors fully embraced Aster’s sustainable finance strategy and recognised and rewarded the leadership shown.

"The transaction, priced off a newly established EMTN Programme and Framework for Sustainable Finance, delivers not only a strong initial pricing and demand outcome but also ensures Aster has established a sustainable issuance platform for the future."


bottom of page