The Golden Lane Housing Retail Charity Bond has raised £10m and closed early owing to high demand from investors.
The bond was launched on 1 November 2017, and an early closure announcement was made on 3 November, after orders from investors reached the target of £10m. The proceeds will be used to further Golden Lane Housing’s charitable objectives, including to refinance previous bonds and to buy and adapt much-needed, high-quality housing across the country for people with learning disabilities.
The Golden Lane Housing Retail Charity Bond offered an interest rate of 3.9% a year for a term of 10 years. Within two days the offer was oversubscribed and orders from investors had to be reduced or turned away, the charity said. The charity will borrow £10m initially when the bonds are issued on 23 November, but a further £8m of “retained bonds” will be created which can be sold and the extra money loaned to Golden Lane Housing at a later date.
The bond is the seventh to be issued through Allia’s Retail Charity Bonds platform since it was launched in 2014, taking the total raised through the platform to date to nearly £160m. It is the second time that Allia has launched a bond for Golden Lane Housing, which was the first charity to raise funds through the platform back in 2014. The £11m raised through the 2014 issue was invested in buying and adapting 30 homes for 112 people with a learning disability.
Golden Lane Housing was established by the Royal Mencap Society to provide quality homes to people with learning disabilities. Since its inception, the charity has built a substantial property portfolio: it either owns or leases 798 homes, which provides housing for 1,645 tenants with a learning disability in the UK (31 March 2017). In addition to providing homes, the charity provides specialist services to its tenants in partnership with other care providers, including Mencap. This includes adapting properties to meet the needs of their tenants.
Phil Caroe, director of social finance at Allia, said: “The success of this latest retail charity bond issue is a powerful endorsement from the market for Golden Lane Housing’s charitable business model and reaffirms the strength of demand for investments offering a positive social impact.
“With four successful retail charity bond issues this year raising a total of £99.5m, this means of raising funds is clearly a proven success in connecting charitable borrowers to mainstream investors and creating access to an attractive source of unsecured loan finance.”
The lead manager for the bond issue was Peel Hunt.
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