Stonewater issues £250m sustainability bond to cut carbon and build thousands of homes

Stonewater, has issued a £250m sustainability bond that will support its plans to deliver 6,250 homes by March 2024.

The ESG-accredited bond aims to help meet other strategies to reduce net carbon emissions and support the housing provider’s social impact. 

As well as supporting Stonewater’s development programme, the 15-year bond has re-established Stonewater’s presence in the public capital markets and was issued at 85bps over gilts, giving an all-in rate of 1.749%.

“We are delighted to secure this new bond funding on such favourable terms,” commented John Bruton, deputy chief executive and executive director of finance at Stonewater (pictured above). 

“Despite the challenging backdrop of the pandemic, we have taken significant steps in the past 12 months to refine our financial approach and ensure our organisation continues to support customers and meet housing needs. 

“In addition to being at the forefront in publishing a Sustainable Finance Framework aligned with United Nations’ Sustainable Development Goals, we have also launched our EMTN programme. 

“This makes it more straightforward to raise funds and places us on a firm footing to work with our funding partners to deliver on our commitments to customers in the years to come.”

Katie Farrell, assistant director at Rothschild & Co — which provided treasury advice — said: “Stonewater’s debut sustainable bond issue completes another major funding milestone following the group's recent organisational restructure, the publication of its Sustainable Finance Framework and the establishment of its EMTN programme. 

“It has been a pleasure working with the Stonewater team again in helping deliver these important milestone projects.”

George Flynn, debt and financing solutions at NatWest — a bookrunner on the deal — added: “NatWest is delighted to have supported Stonewater through this exciting journey as its sole ESG structuring bank, sole arranger of the recently established note programme, and joint lead manager of the highly successful sustainability bond issuance. 

“The management team captured investors’ attention and showcased the organisation’s sustainability credentials through the marketing phase, which resulted in strong over-subscription.”

Stonewater aims to complete 1,500 homes a year from 2022/23, and has at least 1,000 new homes due to be finished in 2021/22 — almost double what it achieved last year.

The 34,255-home housing association is also investing in existing properties to ensure they remain safe and affordable for all customers, from general needs social housing and shared ownership, to specialist retirement and supported living accommodation.

Working alongside Guinness, Stonewater has also just been named by Homes England as one of its largest strategic partners, having been provided with circa £250m of funding to build 4,180 high-quality, affordable homes by 2029. 

This is in addition to the £224m awarded to the strategic partnership by Homes England in 2018 to build 4,500 homes by 2025.

Leave a comment