L&Q successfully completes £500 million bond issuance

Published on 21/07/2017
L&Q, one of the UK's leading housing associations and one of London's largest residential developers, with over 90,000 owned or managed homes in London and the South East of England, has successfully completed a £500 million bond issuance.
The issuance was conducted by way of a dual-tranche offering of Sterling Secured Notes in the form of £250 million 12-year and £250 million 40-year bonds.  
The 12-year priced at Gilts +100bps and the 40-year at Gilts +105bps, representing the lowest bond yields and coupons ever achieved by a UK housing association for these tenors. The effective re-offer yields, inclusive of hedging activity conducted by L&Q, were 2.20% for the 12-year and 2.70% for the 40-year. The coupons payable are 2.25% on the 12-year and 2.75% on the 40-year.
This is L&Q’s largest bond issuance to date and the proceeds will be used for general corporate purposes and refinancing of existing debt.
This transaction also achieves L&Q’s stated objective of rebalancing the Group’s mix of bank and bond financing, fixed and floating rate debt and extends L&Q’s average debt maturity profile with the 40-year marking the longest point on the issuer’s GBP curve.
Commenting on the bond issuance, Waqar Ahmed, Group Director of Finance, said:
“We are delighted with the success of this dual-tranche fund raise.  The extensive interest from, and take up by, so many blue-chip financial institutions is testimony to the strengths of, and prospects for, L&Q.
“The bond issuance allows us to progress our commitment to enabling the delivery over the next decade of 100,000 urgently needed new homes.”