Provider also extends its borrowing facilities with NatWest
Bromford Flagship has issued the first bond issuance under a recently established borrowing programme.
The 80,000-home housing association set up a Euro Medium Term Note (EMTN) programme in June to enhance its access to capital markets and enable it to deliver its plans to build 2,000 new homes annually over the next three decades.
EMTNs are a type of medium-term, flexible debt instrument which is offered continuously, unlike a bond which is issued all at once. Usually issued in countries that deal with euro currencies, EMTNs allow issuers to enter foreign markets to obtain capital.
This week it announced it had completed it had issued a £300m sustainable bond with a 25-year maturity.
Bromford Flagship claimed its bond was “met with strong investor demand in the current market conditions” and that it was four times oversubscribed.
The bond was priced at government gilts plus 0.82%, producing a coupon and yield of 6.072%, which it claimed was the sector’s “tightest spread in four years”.
Its announcement was accompanied by the news that the housing association had finalised a term loan from NatWest, extending the life of lending facilities previously available to the group.
Bromford Flagship’s chief finance officer Paul Walsh said: “These deals optimise our ongoing debt facilities whilst raising some new funds that support our liquidity.
“They increase the average life of our outstanding debt and demonstrate our confidence to fund the business for the long term to support our ambition to be one of the largest builders of much needed social and affordable homes in the UK.
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“This is an important milestone which will allow us to move forward with our future financing and development plans and enables us to access the additional £1.9 billion capacity following the creation of Bromford Flagship earlier this year.”
The association was created out of the merger of Bromford Housing Group and Flagship Housing Group, which was completed in February this year.
It manages homes across east, central and southwest England, and completed 1,770 new homes in 2024/25.
This was 9% lower than Bromford and Flagship combined built in the previous year, but came amid a “a challenging economic backdrop.”
More than a third of the homes – 519 units – were for social rent, which is relatively high for the sector and, after new land acquisitions and agreements with development partners, the provider now has a pipeline of 6,500 homes.
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