Greensleeves Care raise £33million through Allia’s Retail Charity Bond platform
First retail bond to be issued for the care sector
A Retail Charity Bond for Greensleeves Care has closed after less than a week, having raised £33 million. The Bond, which pays an interest rate of 4.25% a year for a term of 9 years, saw strong demand from a wide range of institutional, ethical and individual investors.
The Bond will be issued through Allia’s Retail Charity Bond platform. Allia, a charity and specialist in social investment, launched the platform in 2014 to provide charitable borrowers with affordable access to unsecured loan finance through the mainstream bond market. The bonds are listed on London Stock Exchange, and investors are able to buy or sell their bonds at any time on the Exchange’s Order book for Retail Bonds. This latest bond is the largest Retail Charity Bond and the lowest interest rate to date. It brings the total raised through the platform to £91million, following previous successful issues for Golden Lane Housing (£11m), Hightown Housing Association (£27m) and Charities Aid Foundation (£20m).
Greensleeves Care is the first charitable care home provider to raise finance through this type of listed bond issue, which can be sold to individuals as well as institutional investors. Unlike some forms of funding, the bond finance is not secured against assets and no capital repayments are required until the end of the bond term. Following the success of this bond, Allia expects more charitable care home providers to look at raising funds in this way.
Greensleeves Care provides care and accommodation for the elderly, primarily through residential, dementia and nursing care services. As a charity, it is driven by its social mission and reinvests its profits back into its operations. The charity currently supports up to 789 residents across 20 residential, dementia and nursing homes located across England, setting and maintaining the highest standards of good practice within an environment that encourages residents to thrive as individuals.
The finance from the bond will enable Greensleeves Care to increase the number of residents it supports through buying and developing new homes, as well as going to pay off all existing debt. With a total of £50 million of bonds created, there is also the option to raise up to a further £17 million by selling more of the bonds in the future.
The lead manager for the bond issue was Peel Hunt LLP as part of their debt capital markets collaboration with JC Rathbone Associates.
Tim Jones, Chief Executive of Allia, said:
“The success of this latest Retail Charity Bond reinforces the strength of demand for impact investment opportunities through mainstream financial products. Allia is very pleased to help Greensleeves Care increase the number of older people it cares for and to have proven the viability of this funding route for other charities in the care sector.”
Henrietta Podd, Director, Peel Hunt, said:
“We are delighted that Greensleeves have raised this new funding at an attractive rate of interest. This is now the fourth Retail Charity Bond to be successfully issued and we have been pleased to see an even wider range of institutions and individuals investing in this latest Bond.”
Paul Newman, Chief Executive of Greensleeves Care, added:
“ We are delighted that we have been part of the largest ever Retail Charity Bond issue. The money will be put to immediate use to buy and develop new homes and sites as we invest in our portfolio and our ability to increase the number of older people who benefit from our award-winning care.”
