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The Devonshires’ Banking Team has advised Genesis Housing Group on its recent £250 million bond issue, which completed on 21 December 2009.
The aggregate amount initially raised was £200 million, with the option to raise a further £50 million in the future. The proceeds of the bond will be used to refinance some of Genesis Housing Group’s existing loan facilities. This will leave the Group with approximately £270 million in undrawn lines and cash balances to be used to meet its current development programme.
Lloyds TSB Bank plc were the sole bookrunner for the issue and the bonds were issued by GenFinance II plc, a wholly owned subsidiary of Genesis Housing Group Limited.
The 30 year bond was issued with a fixed interest rate of 6.064%, which represents a margin of 1.70% above the 30-year gilt rate.
The issue has been rated A1 by Moody’s and AA – by Fitch.
Genesis’ Finance Director Mark Gayfer, commented that “the bond issue represented a very competitive all-in cost of long-term funds against a background of rising interest rates for UK government securities. The efficient use of security and progressive covenant structures all make this a positive move for Genesis Housing Group”. Mr Gayfer added that “strategies are in place to enable Genesis to further improve its financial strength and, in due course, its credit ratings”.
Devonshires’ partner, Julian Barker, commented “we are delighted to have been able to strengthen our relationship with Genesis Housing Group on this transaction and it has been an excellent achievement by all parties concerned to have delivered and completed it in such a tight timescale”.
The Devonshires team was led by Julian Barker, assisted by Gareth Hall, Eleanor James and Chris Hourihan, with input from the Projects and Employment departments.
