15th Mar

Demand for Retail Bonds remains high as Greensleeves Care calls time

Retail Charity Bonds plc has announced that award winning care home provider Greensleeves Care has closed the books on its retail bond fully ten days before its planned deadline of 12 noon on 24th March.

In a sector where demand consistently exceeds supply, early closure of retail bond offers has become the norm as investors desperately seek income. 

Greensleeves’ offer of 4.25% p.a. maturing 2026 and secured against a loan to Greensleeves Homes Trust, has clearly proven attractive. 

Commenting on the launch, Bryn Jones who heads runs Rathbones’ Ethical Bond fund, said the charity ‘has strong cash flow and good asset quality.’ Would be investors would want to know where a company derives its revenue from and Jones indicated that he saw a lot of visibility around the future cash generation of the business. 

The issuer announced the early closure of the offer period at 10:30am on 14 March 2017; the bond will be under ‘When Issued Dealing’ (WID) between 15 March 2017 and 31 March 2017, after which it will commence unconditional trading. 

Operating independently since 1997, Greensleeves Home Trust, operating as Greensleeves Care, emerged from the Women’s Royal Voluntary Service and provides quality residential, dementia and nursing care, comfort and security, to around 800 residents across 20 residential care homes, including two nursing homes, in the Midlands, South and East of England.  

The raise of £33m is considerably higher than its original stated target of £20-£30m and the most ever raised on the Retail Charity Bond Platform; £50m of bonds were created leaving the flexibility to sell a further £17m at a later date. 

Retail Charity Bonds is a special purpose issuing vehicle created by UK charity and social investment specialist Allia, that connects charitable organisations seeking unsecured loan finance with investors; it now expects more care home providers to choose this method of funding. 

Paul Newman, Chief Executive of Greensleeves Care, commented:     'We are delighted that we have been part of the largest ever Retail Charity Bond issue. The money will be put to immediate use to buy and develop new homes and sites as we invest in our portfolio and our ability to increase the number of older people who benefit from our award-winning care'.    

Tim Jones, Chief Executive of Allia, said: 'The success of this latest Retail Charity Bond reinforces the strength of demand for impact investment opportunities through mainstream financial products. Allia is very pleased to help Greensleeves Care increase the number of older people it cares for and to have proven the viability of this funding route for other charities in the care sector.

'Henrietta Podd, Director, Peel Hunt, said: “We are delighted that Greensleeves have raised this new funding at an attractive rate of interest. This is now the fourth Retail Charity Bond to be successfully issued and we have been pleased to see an even wider range of institutions and individuals investing in this latest Bond.”  

The bonds will pay a coupon twice yearly on 30th March and 30th September of each year with the first coupon payment being made on 30th September 2017.  

The funds raised will be loaned, via a loan agreement, to Greensleeves Homes Trust; the bonds are expected to mature on 30th March 2026 with a final legal maturity on 30th March 2028.  

The bond was issued with a minimum initial subscription of £500 and multiples of £100 thereafter; secondary market trading will be via the London Stock Exchange’s Order Book for Retail Bonds. 

Recognised with a raft of awards for the quality of its care in 2016, Greensleeves Care prides itself on its highly qualified and loyal staff and as a company achieved an 84.2% ‘good’ or ‘oustanding’ rating from the Care Quality Commission. 

It is underpinned by strong market dynamics with a rapidly ageing population and a declining number of care home beds. Greensleeves has high levels of, predominantly privately funded, occupancy, and delivers strong and sustainable cash flows which it returns to improve and expand services to its beneficiaries.   

The charity has a sustainable business model that delivers growth and social value resulting in award-winning care.   

Greensleeves Care has a balanced approach to growing its portfolio, based on a mixture of acquisitions, redeveloping the existing estate and managing the development of new homes to ensure operational efficiency.  Led by an experienced management team with significant sector experience, Greensleeves Care is committed to its long-term strategy of delivering quality care and nursing services to an increased number of older people.  

This was the fourth Retail Charity Bond to be launched, following successful issues for Golden Lane Housing (£11m), Hightown Housing Association (£27m) and Charities Aid Foundation (£20m). 

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