Building a better future by investing in affordable homes, services and communities
Platform Housing Group, one of the UK’s largest housing associations with an exclusive Midlands focus, provides over 46,000 quality homes and has an efficient and low risk Social Housing focussed business model, with 88% of turnover derived from social housing letting activities. Platform delivers consistent sector leading financials and has consistently received strong external endorsement from the Regulator of Social Housing (G1/V1) and two A+ stable credit ratings (S&P, Fitch).
Over the past four years to March 2021 Platform has built over 5,500 new homes and plans to develop another 9,000 homes by 2026, which includes 4,680 homes as part of the Affordable Homes Programme grant regime which was announced in September 2021.
Sustainability is a cornerstone of Platform’s 2021-26 Corporate Strategy. Earlier this year, the housing association established a Sustainable Finance Framework to highlight not only its current sustainability successes but also its ambitious plans, and to enable the business to fund its future aspirations through a variety of Sustainable financing instruments – such as public bonds, private placements and bank loans.
Platform’s Sustainable Finance Framework focuses on Affordable Housing and Green Buildings (the two core project categories for the sector) and contributes to the United Nations Sustainable Development Goals (SDGs) # 1 “No Poverty”, # 7 “Affordable and Clean Energy”, # 9 “Industry, Innovation and Infrastructure, # 11 “Sustainable Cities and Communities”, and # 13 “Climate Action”. The company obtained a Second Party Opinion from DNV GL, which confirmed the alignment of the Framework to applicable International Capital Market Association (ICMA) and Loan Market Association (LMA) standards for the debt markets.
Platform is also an early adopter of the Sustainability Reporting Standards (SRS) for Social Housing, publishing their first report disclosing their ESG performance – as stipulated by the Standards - in July this year. Its framework sets out in detail alignment of project categories to the SRS.
Sustainability Bond funds the development of new affordable housing
Following on from its inaugural 2055 bond issuance in 2020, which NatWest supported as Lead Manager, and its £1 billion Euro Medium Term Note (EMTN) programme established earlier in 2021 – with NatWest in the role of Sole Arranger – the housing association sought to tap the capital market for its inaugural Sustainability Bond. Platform has been maintaining regular dialogue with the investor community with frequent updates and presentations, which has been very well received.
Platform targeted a 20-year tenor with a view to capture the broadest base of demand from ESG focused investors by targeting a relatively undersupplied tenor by the sector. Following the announcement of the £250 million inaugural Sustainability Bond, a strategy involving a Group Investor call as well as one-to-one sessions with accounts was recommended, to ensure investors understood the details of Platform’s credit story and sustainability strategy.
Proactively engaging with a broad base of investors paid off, with accounts submitting orders of over £775m. This enabled Platform to tighten the pricing to G+87, setting the coupon at 1.926%. Platform achieved 37 investors in the final allocated book, including a number of new names, which demonstrated the success of the strategy to build a wide, diverse and high quality book – this positions Platform very well for further capital markets activity.
Strong relationship builds foundation for successful transactions
George Flynn, Debt & Financing Solutions, NatWest, commented: “We are delighted that this inaugural Sustainability Bond marks another successful outcome for Platform Housing Group, and we are proud to work with the team again. This Sustainability Bond is a great example of the whole of NatWest jointly working for our customers to help them accelerate sustainable growth.”
Dean Shahfar, Sustainable Finance, NatWest, said: “The Platform Sustainable Finance Framework is helping both develop Platform’s capital structure and grow the sustainable debt market. It gives investors an opportunity to achieve both social and environmental impact through an organisation with an advanced ESG strategy.”
Ben Colyer, Corporate Treasury Director at Platform Housing Group, said: “We were delighted to work with the Natwest Team again on our bond issue, having previously worked with them closely during our inaugural issue and EMTN establishment. Their support, commitment and integrity were key in their appointment as lead manager and helped ensure a very successful transaction.”
Elizabeth Froude, Chief Executive at Platform Housing Group, added: “We are incredibly pleased to have issued this bond. We can now formally link our funding to the excellent projects we invest in, which help to make significant social and environmental improvements to the communities in which we operate, as we push ahead with our ambitious development and de-carbonisation strategies.”
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