Client stories

£250m sustainability bond for Stonewater cut carbon and build homes

We're delighted to have acted as Joint Bookrunner on Stonewater’s inaugural Sustainability Bond, after acting as Sole Arranger for their EMTN programme and Sole ESG Structuring Advisor for the Sustainability Framework, earlier this year.

Delivering for everyone to have a place to call home

Managing 34,255 homes across 133 Local Authorities in England for over 75,000 customers, Stonewater is a leading social housing provider. Stonewater offers affordable properties for general rent, and shared ownership, as well as specialist accommodation such as retirement and supported living schemes for older and vulnerable people, domestic abuse refuges, a dedicated LGBTQ+ Safe Space, and young people’s foyers.

The housing association, which aims to build a minimum of 1,500 new homes a year from 2022/23 onwards, has sustainability at the core of its strategy, with a clear ambition to create sustainable communities for its customers by improving the energy efficiency of existing homes, reducing fuel costs, minimising its overall impact on the environment, and strengthening the relationship with tenants and residents.  

To further improve its social impact, Stonewater has signed up to the National Housing Federation’s (NHF) ‘Together with Tenants’ campaign, which aims to create a stronger, more balanced relationship with tenants and residents.

Stonewater is also an “early adopter” of the Sustainable Reporting Standards (SRS) for social housing, which are designed as a sector-standard approach to ESG reporting.

Sustainability bond debut follows EMTN programme and Sustainable Finance Framework

Aiming to gain swift access to the public bond market, whenever required to raise capital for their significant investments, Stonewater decided to establish a £1 billion Euro Medium-Term Note (EMTN) programme as well as publish a Sustainable Finance Framework with the support of their longstanding banking partner, NatWest, in the role of Sole Arranger for the EMTN programme and Sole ESG Structuring Advisor for the Framework

The housing association’s Sustainable Finance Framework (PDF), published in June this year and allowing for a range of sustainable debt instruments such as bonds, loans or private placements, outlines Stonewater’s sustainability journey. Measures in the framework include commitments by Stonewater to ensure all its 34,255 homes have an EPC rating of at least band C by 2030 and estimated costs of EPC B by 2040 upgrade on stock are included as a stress test in the Business Plan; building 6,250 new homes in the five-year period until March 2024; developing 1,500 new homes every year from 2022/23; and creating strategies for sustainable procurement, sustainable waste management and water management. The framework contributes to the United Nations Sustainable Development Goals (SDGs) No 1 “No Poverty”, No 11 “Sustainable Cities and Communities” and No 13 “Climate Action”. 

Second Party Opinion (SPO) provider ISS ESG confirmed that the framework is aligned with the International Capital Market Association (ICMA) and Loan Market Association (LMA) principles for both Green, Social and Sustainability financing instruments.

After establishing the framework, Stonewater was targeting a £250m 15-year inaugural sustainability issuance, with the NatWest team supporting in the role as Joint Bookrunner.

Given the inaugural nature of this transaction and the importance of thoroughly introducing investors to Stonewater’s credit story as well as presenting their sustainability strategy in detail, the NatWest team advocated for a Global Investor Call and follow-up one-to-one calls with key investors. 

Despite a busy market, investors provided strong feedback on the robustness of Stonewater’s credit story giving the housing association confidence to launch its 15-year debut sustainability transaction. A final orderbook of £430m underlined investors’ confidence in the housing association. This transaction positions Stonewater very favourably for future issuance, firmly establishing them in the sterling bond market and providing a strong platform for future issuances.

Clear momentum for ESG labelled issuances

George Flynn, Corporate Financing & Risk Solutions, NatWest, commented: “We are very pleased to have supported our long-standing customer, Stonewater, with this very successful inaugural sustainability issuance. This transaction has fulfilled Stonewater’s key objectives – to secure intermediate funding in the 15-year maturity, firmly establish Stonewater as an issuer in the sterling capital markets, fund development and refinance existing debt, and to showcase its strong sustainability credentials through the newly established Sustainable Finance Framework. Most importantly, the bond proceeds will help our customer deliver new affordable homes, reflecting the essence of NatWest’s purpose-led strategy:  to accelerate social value in areas where we can make a meaningful contribution as a bank.”

Dr Arthur Krebbers, Head of Sustainable Finance at NatWest, added: “We are delighted to have supported Stonewater with this very successful transaction, which demonstrates the momentum for sustainable issuances in the Social Housing sector with approximately 88% of benchmark bonds issued by housing associations so far this year carrying an ESG label.”

John Bruton, Executive Director Finance at Stonewater, said: “We are delighted to secure this new bond funding on such favourable terms. In addition to being at the forefront in publishing a Sustainable Finance Framework aligned with the United Nations Sustainable Development Goals, we have also launched our EMTN programme. This makes it more straightforward to raise funds and places us on a firm footing to work with our funding partners to deliver on our commitments to customers in the years to come.”

Anne Costain, Director of Finance (Operations) at Stonewater, added: “We are very grateful to the NatWest team for their excellent support and advice for setting up our Sustainable Finance Framework as well as our EMTN programme. The team’s depth of experience in the market was also a key factor in achieving such a successful sustainability issuance debut.”


The information provided in this article has been prepared by National Westminster Bank Plc (NatWest) for information purposes only and is subject to change from time to time. The information and views expressed should not be treated as advice or a recommendation of any kind. NatWest makes no representation, warranty, undertaking or assurance of any kind (express or implied) with respect to the adequacy, accuracy, completeness or reasonableness of the information provided and disclaims all liability for any use you, your affiliates, connected companies, employees, or your advisers make of it. NatWest accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However, this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed.

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