Aster Group has successfully issued £250 million of secured bonds.
The 30-year deal, which includes £50 million of retained bonds, has a yield of 4.596 per cent. The spread at issue – the investors’ margin over the prevailing Gilt rate – is 105 basis points, or 1.05 per cent. The bonds were issued by special purpose subsidiary Aster Treasury plc.
The bond issue follows the Aster Group being given a stable AA- credit rating, after an evaluation by specialist credit rating agency Standard & Poor’s (S&P).
Around half of the funds will be used to help Aster deliver more than 2,000 homes in the next few years. The remaining funds will refinance a proportion of existing loan facilities from the 2012 merger between Aster and Synergy Housing. The merger has generated efficiencies and enabled Aster to reduce its costs – savings which are also supporting the development of more housing.
John Brace, group resources director for Aster Group, said: “The bond issue is excellent news for Aster, our customers and the south west region we serve.
“We’re delighted with the response of bond investors and with our recent strong credit rating. Both demonstrate substantial confidence in Aster and our plans.
“This will help us build on the successes we’ve already achieved since the Aster / Synergy merger last year (2012). We’ve made an enormous range of improvements in processes and services. And it’s produced annual efficiency savings of more than £4 million, higher than our original target, which we’re already reinvesting in our communities.
“Most importantly, the bond will allow us to build vital new affordable housing across our region. This is a lifeline for those in desperate need of high-quality homes in an area where prices are frequently beyond reach. Every home we build serves two to three new customers for Aster and fits right at the heart of our core aim to improve local communities.
“The whole process has involved an enormous amount of work from our own teams and our specialist advisors and we’d like to thank everyone who has helped to achieve this result.”