Retail charity bond raises £31.5m for Hightown Housing Association

A Retail Charity Bond has raised £31.5 million for the Hightown Housing Association and closed early due to high demand. The Hightown Housing Association bond was launched on 10 October and scheduled to close on 24 October, but closed early after strong demand from investors. The bonds will pay a fixed rate of interest of 4% a year and will mature in 2027. Hightown will borrow £31.5m initially when the bonds are issued on 31 October, but a further £6.5m of ‘retained bonds’ will be created which can be sold and the extra money loaned to Hightown at a later date. The funds will be used to support Hightown’s development programme. It expects to build over 1,000 homes in the next two years, 75% of which will be for social, affordable or intermediate rent. This is the second bond for Hightown issued through Allia’s Retail Charity Bonds platform. Hightown was one of the first users of the platform, and raised £27m through a Retail Charity Bond in 2015. David Bogle, Chief Executive of Hightown, said: “We embarked on this funding route as it presents an opportunity for ethically-minded investors to contribute to the delivery of much-needed affordable homes. Once again, the early closure of the Retail Charity Bond underlines the value of building the affordable homes that our region so desperately needs.” Phil Caroe, Director of Social Finance at Allia, said: “This latest successful Retail Charity Bond issue confirms both the market’s confidence in Hightown and its appetite for investments offering a positive social impact. With three successful Retail Charity Bond issues this year totalling nearly £90m, the retail bond market continues to offer an attractive source of unsecured loan finance for housing associations and other charitable borrowers.”

from UK Fundraising http://ift.tt/2ypV54T