As the sands run out on what has been a less than prolific
year in terms of issuance, Places for People has delivered a little
pre-Christmas cheer for investors starved of retail bonds by announcing a seven
year sterling bond offering 4.25%.
Investec is lead
manager on the issue and demand is likely to be strong with more brokers
supporting it in response to high demand from customers seeking income;
Barclays Stockbrokers, Hargreaves Lansdown, Interactive Investor,
Redmayne-Bentley, Saga Sharedealing, Selfrade, Shareview and Walker Crips are
all participating in what is just the fourth issue on the Order Book for Retail
Bonds in 2016.
Places for People Group is one of the largest property and
leisure management, development and regeneration companies in the UK; it owns
or manages 150,000 homes and has assets in excess of £3.1 billion.
Its products and services
are socially and commercially driven - as a not-for-dividend organisation, any
profit it makes is re-invested in the business.
The bond is issued by a wholly owned special purpose
company, Places for People Finance Plc; it is available with a minimum
investment of £2,000 and in multiples of £100 thereafter.
The book is now open and planned to be so until noon on
Monday 12th December subject to demand; maturity is on 15th
December 2013 with coupons being paid on 15th June and 15th
December each year until then.
David Cowans, Chief Executive
of Places for People, said:
‘We are delighted to announce
the launch of this Retail Bond. The funds raised will enable us
to further our work in the
property management, leisure management, development and
construction sectors via our
Operations Group, as well as to diversify its sources of funding.
This will support us in
bolstering our award winning leisure management business, continuing
to grow our property management
businesses, helping to deliver the new homes that the UK
desperately needs and creating more high quality, safe and
sustainable communities.’
Established in 1965, Places for
People (PfP) works with local communities to plan, build and manage high
quality places which are environmentally and economically sustainable.
The Guarantors' principal
activities are summarised below:
PfP Operations - Ownership of
retirement, development, leisure and property management
Companies.
PFPL - Management of local
authority owned leisure facilities; it employs approximately 9,000 people and manages
over 100 leisure centres with 30 million visits per year.
RMG - Management of residential
housing in the private and public sectors; 76,402 leasehold properties under
management in the private sector and a contracted order book of 24,919 units
under construction. RMG mainly looks after purchased properties that are under
leasehold.
Touchstone - Provision of
private rented sector property management services including a whole variety of
different types of stock – new build, purpose built properties or conversions. Touchstone
manages 18,484 properties for institutional and corporate investors, retailers
and buy to let mortgage lenders.
Zero C - Construction and
development of residential and mixed use developments; it is resourced to
deliver in excess of 200 homes
a year and has consents or subject to planning options for
over 1,500, low cost, sustainable
homes, offices and commercial buildings.
At £210 million in 2016, retail
bond sales on ORB are a little over half of the £394 million issued in 2015 and
PfP will be just the fourth to come to market this year.
PfP has not announced a target
for its raise, but the recent trend has been towards smaller issues and lower
coupons; litigation finance company Burford Capital bucked the trend in April
when it printed £100 million of eight and a half year bonds offering 6.125%,
but the other two issues this year have been £80 million by Alpha Plus and £50
million by Charities Aid Foundation each at 5%.
On July 25th Moody’s
downgraded PfP’s rating from A2 to A3 because in its view the company’s
continuing diversification ‘introduced varying risks that are atypical of an
English housing association’; however, that appeared to do it little harm as
two weeks afterwards PfP issued a £400 million bond that was two and a half
times oversubscribed.
For more information see Current Issues