Bromford secures £100m investment with UK and US investors

The 46,000-home housing association, based in Wolverhampton, launched a transaction to the market earlier this month for a new private placement and received bids from both new and existing investors based in the UK and North America.

There were 11 investors, including five potential first-time investors to Bromford, who submitted bids in excess of £700m.

In the three years since Bromford’s previous capital markets issue, the social landlord has delivered more than 3,400 new energy efficient homes, retrofitted over 1,300 homes to EPC C or above, migrated its repairs fleet to more than 100 low carbon vehicles, hired 100 apprentices and graduates, reduced its gender pay gap to 6.5 per cent and delivered over 2,500 customer interventions to generate over £250,000 of additional income to support its customers through the rising cost of living.

The £100m will help fund the housing association’s on-going development programme, which aims to complete 12,000 new homes over the next eight years, as it continues to play its part in helping to tackle the country’s housing crisis.

Bromford’s director of treasury Imran Mubeen said: “These funds will enable us to continue to invest in the delivery of much-needed new affordable housing across the West Midlands and West of England. They will also fund our broad and ambitious sustainability programme which includes decarbonising more of our existing homes, improving diversity across our organisation, and coaching more of our customers into employment and training.

"With a bid book over seven times oversubscribed, and with offers across every point of the tenor curve at attractive spreads, this deal affirms that the capital markets absolutely remain open for housing associations who have a robust business plan and a compelling sustainability narrative. The positioning of our leading credit ratings, and importantly, how we continue to drive our ratings to unlock balance sheet capacity to deliver new homes, carbon retrofit works and our flagship neighbourhood coaching model, resonated with the investor community.

“In an elevated rate environment, and with significant offers at tenors of 10 years and 12 years, we printed this deal at the shorter dated end of the curve, leaving the longer tenors open for lower rate funding in the future.

“We would like to thank all of investors who bid on this deal, especially those new to Bromford, and have made a firm commitment to stay close to the investor community as we return for further funding in 2024.”

Lloyds Bank acted as sole placement agent on the deal, with Newbridge Advisors providing treasury advice and Trowers & Hamlins legal advice to Bromford, while Addleshaw Goddard acted as counsel for investors.

Rory Brown, director, private placements at Lloyds Bank said: “We were delighted to support Bromford’s successful return to the private placement market, with a sustainable offering aligned to their Sustainable Finance Framework. The heavily over-subscribed transaction reflected the highly rated and highly regarded position of the issuer in the market and was testament to the strength of the Bromford story – providing sustainable, affordable homes to their customers.”

Grant Vaughan, partner at Newbridge Advisors, added: “We were pleased to have advised Bromford on their latest tranche of capital markets funding. This demonstrates Bromford’s access to a broad range of liquidity, seeing strong demand from both UK and US investors. This is a testament to their financial and operational strength, enhanced through their ongoing dedication to investor relations which was reflected in the size of the bid book and the universally positive investor endorsement they received.”

The £100m private placement follows a £75m sustainability linked revolving credit facility that Bromford secured with ABN AMRO in June and a £50m sector-first innovative funding partnership with LGIM in August. It is the second deal to be printed from Bromford’s updated Sustainable Finance Framework which was published in June.

Bromford has consistently been one of the top ten biggest housebuilding housing associations over the past three years and last year completed 1,265 new homes, the most it has ever built in a 12-month period. It aspires to be the top developer of affordable housing in Gloucestershire and the wider M5 corridor. The housing association recently received planning permission for its biggest development to date, of 180 new homes on the outskirts of Gloucester.