Onward raises £215m in first bond issue

The housing association plans to use the capital to fuel its growth strategy and invest in stock across Greater Manchester, Lancashire and the Liverpool City Region.

Onward Homes completed its first bond issue on Wednesday, raising £215m amid “very strong market demand”, it said.

In particular, it intends to use the money to help meet its target of building 500 new homes per year and support its business expansion plan.

The housing association in December secured a top credit rating of A1 (stable) from rating agency Moody’s, which noted that the business has a robust balance sheet, low debt and strong liquidity.

As a result, Onward achieved “favourable terms” for its first bond issue, including a loan margin of 0.88% – the lowest ever long-term margin for a UK housing provider, it said.

Onward (previously known as Symphony Housing Group) was formed in 2018 from the merger of five housing associations – Contour Homes, Liverpool Housing Trust, Hyndburn Homes, Peak Valley Housing Association and Ribble Valley Homes.

It owns and manages more than 35,000 homes across the North West and provides affordable homes for rent and sale.

The association said in a statement: “The bond issue is a refinancing exercise to secure low cost, long-term funding, supported by the amalgamation of Contour Homes into Onward Homes, which will formally take place on 1 April.

“When Onward was created in 2018, Contour Homes remained a separate entity because of the potential financial penalties required by lenders. The financial case for full amalgamation now stacks up and the bond issue helps us to realise our full financial strength.”

The current growth strategy proposes to deliver 500 new homes a year in the North West, with a focus on affordable housing and shared ownership. Onward also builds homes for sale through its Onward Living brand. The association is currently bidding to become a strategic partner to government agency Homes England for the forthcoming round of the Affordable Homes Programme.

“Our successful bond issue is the completion of a five-year process to create a single organisation from five separate housing associations,” said Onward’s chief executive Bronwen Rapley.

“We are now realising the financial strength of our united organisation. The investment raised will underpin our business plan for the years ahead, to deliver considerable social, environmental and economic impact in the North West.”

She added: “We are well positioned to make a significant contribution to a green and inclusive recovery in our region by building 500 quality homes a year and investing in communities. We are committed to supporting the Northern Pound by using our spending power within the North West wherever possible, creating community wealth, reducing carbon and maximising positive social impact in the communities we serve.”

Last year, Onward retained its top G1 and V1 credit ratings from the Regulator of Social Housing and aims to continue demonstrating “sector-leading financial and governance credentials”, it added.

Among its schemes in the North West, Onward is working in partnership with Wirral-based housing association Magenta Living to deliver 48 homes in Runcorn, a scheme known as Halton Court.