Stonewater issues £250m bond

Leading housing provider, Stonewater, has issued a £250m sustainability bond that will support its plans to deliver 6,250 homes by March 2024.
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Leading housing provider, 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. Stonewater was awarded the third most sustainable housing association in the UK by Housing Digital in June 2021, testament to how sustainability is core to the organisation.

Working alongside Guinness, Stonewater has also just been named by Homes England as one of its largest strategic partners. The two organisations have been provided further funding of circa £250 million to build 4,180 high-quality, affordable homes by 2029. This is in addition to the £224 million awarded to the strategic partnership by Homes England in 2018 to build 4,500 homes by 2025.

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.”

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.”

As part of its ambitious development plans, Stonewater aims to complete 1,500 homes a year from 2022/23. It is on track to achieve this, despite the recent disruption of COVID-19, with at least 1,000 new homes due to be finished in 2021/22 – almost double what it achieved last year.

The 34,255-home housing association is also investing in existing properties to ensure they remain safe and affordable for all customers from general needs social housing and shared ownership, to specialist retirement and supported living accommodation.

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