L&Q successfully completes £500 million bond issuance

Published on 22/02/2018

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 10-year and £250 million 35-year bonds.  

The 10-year priced at Gilts +118bps, giving a coupon payable at 2.625%, and the 35-year priced at Gilts +135bps, giving a coupon payable at 3.125%.

This is L&Q’s joint largest bond issuance to date and the proceeds will allow the housing association to refinance debt maturities.

Waqar Ahmed, Group Director of Finance at L&Q, said: “This successful bond issuance will allow us to invest in our existing homes and communities, to transform customer service, and to invest in people and skills.

“It will also help us deliver our plans to accelerate the provision of 20,000 much needed new homes in London, of which 60% will be genuinely affordable as part of our strategic partnership with the Mayor of London. They will also enable further initiatives that will support smaller housing associations build more homes in London, the South East and beyond.”

Martin Watts, Director of Treasury at L&Q, added: “We are delighted that so many blue-chip financial institutions continue to support L&Q and our social objectives.

“This successful bond issuance means that we now have the capital structure to support our corporate plan, manage interest rate volatility whilst retaining enough liquidity to fund our committed development programme.”

L&Q has now raised £1 billion in the current financial year, with a weighted average life of >24 years at a weighted average semi-annual coupon of less than 2.7%.

The deal was placed by Lloyds Bank, NatWest Markets and Santander as joint bookrunners. Savills conducted the valuation and L&Q appointed Allen & Overy LLP as legal counsel. Devonshires Solicitors LLP was appointed as legal counsel on property matters.