Optivo successfully raises c.£150 million of deferred funding

 

17 September 2020

Optivo has successfully raised c.£150 million of deferred funding, de-risking our business plan and further supporting our core aspiration in providing much needed social housing to our community.

With a strong short-term liquidity position, bolstered further by securing access to the Covid Corporate Financing Facility (“CCFF”) in May this year, our treasury strategy has focussed on longer term funding, particularly given the current favourable market conditions.

We have also undertaken extensive work on our credit positioning in recent months, alongside our newly revamped investor relations website and issuing our first ESG report and looked towards this transaction as a way to capitalise on the recent strong performance of Optivo’s credit spreads. 

The transaction structure offered three key benefits to Optivo:
  1. The 18-month deferral, at a credit spread inside of our secondary curve, provided a significant cost of carry saving versus an immediately drawn bond issue

  2. Increasing the size of the 2043 bond to “benchmark” (£250m plus), the liquidity in the secondary market should improve as a result of it becoming eligible to index funds

  3. Raising £150m of proceeds against a nominal value of £100m, the secured transaction offers Optivo security charging efficiencies
 
This excellent result demonstrates the strong positioning enjoyed by Optivo within the capital markets and reaffirms that our long-term strategic plan is understood and supported by bondholders. 
 
We were pleased to have worked alongside Lloyds Bank as Placing Agent, Newbridge as our advisors (treasury), Devonshires as legal advisors and Addleshaw Goddard acting for the investors and Placing Agent.
 

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