Care home provider Anchor Hanover raises £350m through a sustainability bond which will help it build 5,700 ‘green homes’ for the elderly
- Britain’s largest care home provider has issued a £350m sustainability bond
- The bond was more than two times oversubscribed
- It comes as part of a wider £1bn financing restructure
Anchor Hanover, Britain’s biggest retirement home company, has raised £350million through its first sustainability bond as part of a wider refinancing.
Social infrastructure, particularly care homes, have been thrust into the spotlight during the pandemic and more and more people are looking at ways to invest.
There have been concerns about a shortage of social housing in the UK and while the Government has committed money to infrastructure, it is increasingly reliant on private companies to plug the gap.
Anchor Hanover is England’s largest not-for-profit retirement home provider, with more than 1,700 locations across the country.
Anchor Hanover supports more than 65,000 people in retirement housing and residential care homes
Its sustainability bond was more than two times oversubscribed by over 40 institutional investors, including specialist impact asset managers, with a spread of 0.93 per cent and an all-in coupon of 2 per cent.
Anchor Hanover said it will use the fresh cash to deliver 5,700 new sustainable care homes over the next decade, alongside existing investment in its existing services.
Like the Treasury’s recently announced green bonds, proceeds from the issuance of a sustainability bond are exclusively applied to finance or refinance a combination of both green and social projects.
Anchor Hanover’s bond issuance comes as part of wider financing restructure. In April it became the first housing association to move its banking facilities to a fully unsecured basis.
A key component of the refinancing is a new £300million unsecured syndicated sustainability-linked revolving credit facility and a £350m unsecured bridging loan.
Unsecured debt has no collateral attached to it, meaning the loans are granted based on Anchor Hanover’s creditworthiness.
It said the move, which has seen it secure a long-term A+ credit rating from S&P, will allow it to benefit from the ‘long-term stability from debt capital markets that will underpin its ambitious growth plans.’
A handful of housing associations have taken out sustainability-linked loans over the past year and Lloyds Bank has committed £500million to ESG-focused social housing projects.
‘We have ambitious plans to meet the increasing needs of older people in a sustainable way,’ chief financial officer Sarah Jones said.
‘This very successful issue means we can continue to evolve our housing and care offer so more people can have a home where they love living in later life.’
Phil Jenkins, managing director at Centrus, the adviser on the refinancing said: ‘This successful deal is the culmination of the innovative refinancing of Anchor Hanover’s treasury portfolio.
‘We are delighted to have worked closely with Anchor Hanover, who are pioneering leaders in the housing and care for older people.’
Disability charity Mencap’s property arm recently launched its third retail bond with a 3.25 per cent annual return.
Golden Lane Housing, which specialises in renting accommodation to people with learning disabilities, was the first charity to issue a retail bond in 2014, offering a 4.375 per cent return, before offering a £18million 3.9 per cent bond three years later.