Client stories

Beyond Housing issues debut Sustainability Bond

Find out how we supported Beyond Housing with the issuance of its inaugural sustainability bond.

Helping communities to succeed and thrive

Following the merger of two established social housing providers, Beyond Housing was established in 2018 to provide affordable homes and a wide range of services to its over 30,000 customers living in Beyond Housing’s 15,000 homes across Tees Valley and North Yorkshire.

As one of the largest landlords in the region, Beyond Housing’s almost 800 colleagues recognise that their role in society is one that is much bigger than bricks and mortar, and they’re committed to enhance their customers’ quality of life by offering a wide range of support, which, for example, includes the creation of apprenticeships and jobs, sub-contracting to local social enterprises, or working with residents to create new and improved community spaces.

Sustainable Bond Framework to reflect commitment to sustainability

Earlier in the year, Beyond Housing sought advice from NatWest on the development of a Sustainable Bond Framework in order to be able to issue Sustainability Bonds in the future and to reflect its commitment to sustainability in its financing strategy.

The NatWest team led the construction of the framework and worked closely with the second party opinion (SPO) provider, ISS, to provide a detailed SPO of Beyond Housing’s Sustainable Bond Framework, which ISS confirmed is aligned to the ICMA Social Bond Principles, Green Bond Principles and Sustainability Bond Guidelines.

On the back of the new framework and marketing to investors, Beyond Housing’s debut £250 million sustainability issuance, which NatWest supported in the role of Active Bookrunner, attracted orders from more than 30 institutions, with the total order volume reflecting a four times oversubscription.

Beyond Housing went with a coupon of 2.125% and a 30-year maturity. The proceeds of the bond, which is rated A2 by Moody’s, will be allocated to eligible projects in the framework’s categories “Affordable Housing” and “Green Buildings”, delivering positive environmental and social change for Beyond Housing’s customers and partners.

Beyond Housing and NatWest – a strong partnership

NatWest Bank’s relationship with Beyond Housing predates its formation in 2018, by providing funding and transactional banking support to facilitate the initial stock transfer organisations. The relationship journey grew further by increasing facilities throughout, and as part of the merger, to form Beyond Housing.

Continuing to support Beyond Housing to achieve its strategic aims, the NatWest team worked on an additional funding package for the housing association alongside the suitability linked public issuance. The package consisted of the restructuring of the existing debt, restructuring the hedging in place, as well as the extension and consolidation of a £30million Revolving Credit Facility (RCF), which offers additional liquidity and complements Beyond Housing’s debut sustainability issuance.

Investors support Beyond Housing’s community approach

George Flynn, Debt and Financing Solutions, NatWest, said: “The NatWest team is delighted to have supported Beyond Housing on the issuance of its inaugural Sustainability Bond, marking the first long-dated (>20 years) Sustainability Bond in the social housing sector. Beyond Housing has a very strong ESG story, with targets to reduce its environmental impact and a clear social impact focus around regeneration, tackling homelessness and providing affordable housing. The management team captured investors’ attention and showcased the organisation’s sustainability credentials through the marketing phase, which resulted in strong oversubscription during execution. This positions Beyond Housing very well for future capital markets activity and will support the construction of high-quality affordable housing in the North East of England. We’re excited that we can actively contribute to social, economic and environmental progress in the UK by supporting customers such as Beyond Housing.”

Dr Arthur Krebbers, Head of Sustainable Finance Corporates, NatWest, added: “Beyond Housing’s Sustainability Bond highlights yet again the pioneering role the social housing sector plays in the transition to sustainable business practices. The transaction also underlines our ongoing success with Housing providers across the country; and we are very pleased that we had the opportunity to support Beyond Housing with their Sustainable Bond framework that covers both their social and environmental programmes.”

Alan Newlands, Housing Finance, Real Estate Finance, NatWest, commented on the additional funding package: “Last year, NatWest Group announced that it will be investing £3 billion in social housing across the UK over the next three years, supporting the construction of 20,000 homes. And, so with Beyond Housing pressing ahead with the delivery of much-needed homes across the North East of England, it was rewarding to offer our long-term and valued customer a restructured and flexible financial package to help support the delivery of new homes. We are looking forward to continuing our relationship with Beyond Housing as they deliver positive change by helping the communities in which they operate, thrive and succeed, whilst driving a sustainable agenda.”

Rosemary Du Rose, Chief Executive, Beyond Housing, said: “At Beyond Housing we are committed to sustainability, and genuinely care about the work we do in supporting customers and communities and having a positive impact on their lives. This bond will enable us to invest in existing homes, making them more energy efficient and helping us move to become a carbon zero organisation. In addition, it will help us deliver our ambitious development programme, providing value for money and securing the company’s long-term plans. Securing the first long-dated sustainability bond in the social housing sector is a landmark achievement for Beyond Housing and a testament to the work of our team in delivering exceptional financial and sustainability credentials.”

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. Copyright 2021 © NatWest Bank Plc. All rights reserved.

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