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A2 Dominion launches £250m 3.5% 12 year unsecured bond

On 4th November, A2 Dominion launched and priced a benchmark £250m 12-year bond issue. The issuer is the holding company for the A2Dominion Group and the bonds are senior unsecured obligations of A2Dominion. This is thought to be the first public bond issue in the housing sector issued by a non asset owning holding company. The structure  allows the group complete flexibility regarding deployment of the funds. Investors are protected by a single unencumbered asset covenant which applies across the Group. The bond carries a single rating from Fitch of A+ and the issue was the first from A2Dominion’s recently listed £1bn Medium Term Note programme.

The issue was launched as a £250m no-grow bond at 09.30. Books were closed at 12.30 with demand of over £300m from a total of 31 investors including several life and pension funds. Price guidance of a spread of 230-235bps was revised to 230bps and the issue was priced early afternoon at a coupon of 3.5% at a small discount.

Centrus Advisors was appointed to advise A2Dominion and worked closely with the company and with their appointed bookrunner, Lloyds Bank to bring this transaction to a successful conclusion. Having considered various financing options, including a retail transaction, a banking offer and a bi-lateral institutional proposal, it was decided that the deal undertaken offered the optimal mix of structural flexibility and pricing.