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Housing finance aggregator Blend has announced a £55m bond for two housing associations (HAs), which is a tap on an existing 2054 bond.

Picture: Getty

Picture: Getty

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Housing finance aggregator Blend has announced a £55m bond for two housing associations, which is a tap on an existing 2054 bond #SocialHousing #UKhousing


The £45m tap will be on-lent on a 12-month deferred drawdown basis, with the remaining £10m on-lent on a spot basis. B3Living is set to receive £35m and Orwell Housing Association will get the remaining £20m.

The tap transaction was priced at 113 basis points (bps) over gilts, implying a new issue premium of 4bps, which is tighter than that seen in other recent HA issuances, according to Blend. The deferral premium is expected to be lower than 12bps, leading to all-in costs of 2.52 per cent for the spot component and less than 2.64 per cent for the deferred.

In a statement, Blend said that the market had seen “increased volatility of late”, with gilt yields and market prices rising with the Bank of England’s forecast on the likelihood of a base rate rise as early as November this year.

However, the aggregator said that spreads remain tight, which reflects the stability of investor interest in the HA market.

The bond transaction was more than four times oversubscribed, including two sovereign funds augmenting more typical long-term sterling investors, Blend said.



In the past 18 months Blend has lent more than £800m at under 2.5 per cent. As gilt yields rise, access to strong credit and issuing experience will become more important for associations looking for the lowest cost of funds, the aggregator warned.

Piers Williamson, chief executive of Blend, said: “While the pandemic is far from behind us, it is apparent that we are entering the next stage of recovery and that the market is adjusting to this. Against this uncertainty, Blend is well placed as an experienced issuer to continue to secure competitively priced funding for our borrowers.

B3Living was created in 2006 following a stock transfer from Broxbourne Borough Council. Today it has more than 4,800 units.

Alex Shelock, executive director (finance) at B3Living, said: “We’re very pleased, as we know the difference this funding will make in our local area. Our community is under unique pressure for housing: we see high outmigration from London but historically there have been very low levels of development.

“As part of our Better Futures strategy, B3Living is gearing up to deliver our largest project to date, Cheshunt Lakeside, and build over 500 properties across the next three years. This means we’ll be building more new homes in three years than we have over the previous 30 years combined, and this loan will make that possible.”

Orwell Housing Association manages 4,000 homes across East Anglia and has previously borrowed from The Housing Finance Corporation’s (THFC) subsidiary Affordable Housing Finance. Blend is also a subsidiary of THFC, which has £8bn of lending to around 160 housing associations.

Chris Wyer, director of resources and growth at Orwell, said: “This funding exercise is a key element of our strategy to continue developing quality homes and services for our communities across Essex, Norfolk and Suffolk.

“Through Blend we have been able to structure our loan to include spot and deferred elements, which has allowed us to mitigate against inflation risk and build certainty into our development strategy. To lock in this rate for 30 years through Blend is a fantastic outcome for us and our tenants.”

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