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Newlon secures £135 million through private placement

1st Oct 2018

Newlon Housing Trust has once again successfully accessed the private placement market, obtaining commitments for £135m of long-term debt from three new institutional investors based in the US and Canada.

The transaction was launched at £80m and then upsized to £135m following the extraordinary level of interest and support from investors. It was six times oversubscribed, attracting offers from UK, US and Canadian institutions across a range of tenors and price points.

Newlon will pay rates between 3.14% and 3.38% for the notes which have maturities between 15 and 35 years. The notes include an element of forward funding out to April next year.

Newlon’s success goes to show that medium-sized housing associations can access the capital markets on terms which are comparable with even the largest housing providers.

Newlon is rated A3 (stable) by Moody’s and the pricing reflects Newlon’s credit strength and track record over the last five years.

Surjit Dhande, Newlon’s Group Director of Finance and Resources commented “Newlon is delighted to have achieved this funding package, representing very good value in the market. The terms and maturities complement Newlon’s requirements. The money will be used to help fund our development objective of delivering much needed affordable housing in London.”

The deal was arranged by Barclays, who acted as sole placement agent on the offering. JCRA was the financial adviser to Newlon. Devonshires acted as UK legal counsel and Morrison & Foerster as US legal counsel.

Newlon previously successfully raised £100 million from a private placement in 2012.