Futures secures £310m to continue growing ambition
Futures Housing Group has secured £310m to help it deliver around 1,200 new homes as part of its ambitious growth plan. A total of £110m of funding has been secured from new bank facilities with the remaining £200m coming from the public bond market.
Futures, which manages nearly 10,000 homes throughout the East Midlands, delivered a series of roadshows and attracted interest from over 40 investors.
The 25-year bond, issued directly by Futures, had an assigned Standard & Poor credit rating of A+, with negative outlook - reflecting the outlook on the UK.
The new funding will help support the Group’s £170m development programme which aims to deliver 1,200 homes over the next five years. The remaining funding will be used to restructure the Group’s existing debt.
Due to strong demand for the bond, with around £900m tabled from 40 potential funders, the price and interest level was lowered, creating a competitive rate for the Group of 168 basis points over Gilt and a coupon of 3.375%.
Lindsey Williams, Futures Housing Group’s Chief Executive, said: “This is an investment in Futures and reflects everyone’s hard work across the organisation which has created an agile, effective and efficient business. It has also positioned us for further growth and more partnerships.
“The level of investment also reflects our ambition and our vision to develop more new homes while making savings and improving performance.”
Tony Taylor, chairman of the Futures Housing Group Board, said: “It is a great indication of our ambition, our confidence and our appetite to grow.
“We’re excited about what the future holds for us and our customers and I believe we have an excellent arrangement in place to meet our ambitions.”
The bookrunners for the bond were Santander and NatWest Capital Markets while Savills provided advice.
Mike Roche, a Director at Savills Financial Consultants, said: “We are proud of the relationship we have built with Futures Housing Group over the last five years, which has helped the organisation secure a deal that will lead to it developing many more much-needed homes.
“Our long-term approach to this exercise has yielded a fantastic result for Futures.
“The £200m bond was six times oversubscribed, demonstrating the huge investor appetite for strong borrowers outside London and the South East and providing diversification to the investor’s portfolios.”
The cash injection means the housing provider will continue to develop new homes to help tackle the chronic housing shortage throughout the UK – especially in the East Midlands where there’s a 25,000-home shortfall.
It is the latest milestone for the growing housing provider. This year it will have almost completed its corporate aim to deliver 1,000 new homes while in 2018 it achieved Investors in People Gold, Investors in Excellence Great rating and retained its G1/V1 status.