£25 million Retail Charity Bond issued for Dolphin Living
The latest Retail Charity Bond, for Dolphin Living, was issued today after the offer raised £25m in just over 24 hours.
The Bond was launched at 1.30pm on Tuesday 20 June, and an early closure announcement was made before 3pm the following afternoon, after orders from investors exceeded the target of £25m. The proceeds will be used to invest in the growth of Dolphin Living’s London portfolio, including the existing pipeline of 196 homes under development.
The Dolphin Square Charitable Foundation Retail Charity Bond offered an interest rate of 4.25% a year for a term of nine years. Within a day the offer was oversubscribed and orders from investors had to be reduced or turned away. The charity will borrow £25m initially when the bonds are issued on 6 July 2017, but a further £20m of ‘retained bonds’ will be created which can be sold and the extra money loaned to Dolphin Living at a later date.
The Bond is the fifth to be issued through Allia’s Retail Charity Bonds platform, taking the total raised to date to £116m. Following a £33m issue earlier this year for Greensleeves Care, which was the largest Retail Charity Bond to date, this latest bond has been the fastest selling yet.
Dolphin Living seeks to provide well-designed, good quality housing at market and sub-market rents for people on modest incomes who live or work in the City of Westminster and surrounding boroughs. The parent charity of the group, The Dolphin Square Charitable Foundation, was founded in June 2005 and funded by a total of around £125 million from the proceeds of the sale of leasehold interests in the Dolphin Square mansion block in Pimlico by Westminster City Council and Dolphin Square Trust.
In its first five years, Dolphin Living focused on grant making activity for a range of community-based projects with the aim of alleviating the affordable housing shortage. From 2010, it accelerated its plans for building its own portfolio in order to directly address the need for more affordable housing stock, resulting in a significant growth in completed homes from 2013. Today it owns and manages 600 homes and has a further 196 homes under development.
The lead manager for the bond issue was Peel Hunt LLP as part of their debt capital markets collaboration with JC Rathbone Associates.
Olivia Harris, Chief Executive of Dolphin Living said:
“Dolphin Living is delighted at the success of the bond launch. The response, from what was a diverse mix of investors, reflects the increasing interest in intermediate rental housing. It is an acknowledgement of both the strong business case for our product and our track record over the past 7 years, as well as the positive social impact that affordable housing provides.”
Phil Caroe, Director of Social Finance for Allia said:
“The speed of this latest Retail Charity Bond offer reflects both the strength of demand for impact investing opportunities and the growing reputation of Allia’s Retail Charity Bonds platform. With over £100m of bonds now issued, the platform has been proven a success in connecting charitable borrowers to mainstream investors and creating access to a source of simple, unsecured loan finance.”
Henrietta Podd, Director, Peel Hunt, said:
“We are delighted with the response from investors on the Dolphin Living issue, which demonstrates the breadth and strength of the demand for ethical issues.”
