Orbit sees £300m bond oversubscribed multiple times

Orbit, one of the UK’s largest social housing providers with over 44,500 homes, has successfully priced a £300m 18-year bond issuance at a 2% coupon.

Orbit decided to approach the sterling bond market with its first transaction since 2018. With the aim of diversifying its existing maturity profile whilst also taking into account the significant investor demand for intermediate social housing issuances, Orbit targeted a benchmark (£250m) deal in an intermediate tenor range of 15-18 years.

After an intensive day with high levels of investor engagement, the transaction received over £1.75bn of orders at final guidance. This indicated an order book that was seven times oversubscribed, reflecting the strength of Orbit’s credit standing, strategy and market leading ESG credentials.

Orbit managed to achieve 20bps of price tightening, enabling the transaction to print at Gilts+135bps, representing a negative new issue concession of 5bps resulting in a landing level significantly inside Orbit’s existing secondary spread levels.

Jonathan Wallbank, Group Finance Director at Orbit, commented: 

“From the outset of this transaction, our objective was to attract as many quality investors as possible and position Orbit strongly in the market. We are therefore delighted by the landmark levels of interest received from the investor community, which is a clear reflection of Orbit’s strong credit fundamentals.

“This funding meets our corporate finance objectives and supports our vision at a time when affordable, quality homes and services are needed more than ever.”

Bookrunners were HSBC, NatWest Markets and Santander. Rothschild & Co acted as financial advisors to Orbit.