Moody’s has awarded an investment-grade rating to the bonds to be issued by PRS Finance, the delivery partner for the government’s private rented sector scheme.
PRS Finance, a division of investment manager Venn Partners, was appointed to originate and manage loans for the PRS market in December 2014.
As a part of this, the company has launched a £3.5bn bond programme that will start issuance in the later part of the year.
The bonds have been rated Aa1 by Moody’s, more generally known as AA. The high rating means that they can be sold to a broad range of institutional investors.
The bonds are government-guaranteed and as such will be priced at a small spread to government bonds of the same maturity.
As a result of the guarantee, the rating is linked to Moody’s UK government rating.
PRS Finance will be able to issue bonds with maturities out to 30 years and expects them to be popular with insurance companies and pension funds.
Since its appointment as delivery partner, Venn has received more than 130 applicants to the scheme, which seeks to invest in purpose-built projects in the private rented sector of more than £10m in value.
Gary McKenzie-Smith, Venn Partners’ co-founder and managing partner, said: “This rating will be a key requirement of raising attractive term financing for PRS operators and delivering genuine scale into this important market initiative.”
