Sovereign Network Group issues £400m bond as it aims to build 25,000 homes over the next 10 years

Sovereign Network Group has raised £400m in its first post-merger public bond issue, to help fund the construction of 25,000 new homes over the next decade.

SNG’s strategic aim is to build 25,000 new affordable homes in the next 10 years, which will be developed in line with its Homes and Place standard.

Sovereign and Network Homes merged on 1 October 2023, to form SNG, which now owns and manages a total of 82,000 homes. 

The Homes and Place standard aims to make SNG homes net zero by 2050, as per the government’s Future Homes and Buildings Standards.

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On the issuance of the bond, an SNG spokesperson said: “This will support our strategic development goals across both our existing pipeline and new opportunities. We are actively seeking both land and JV partnerships to deliver the good, affordable homes that will offer our future customers the foundation for a better life.”

Peter Benz, chief financial officer at SNG, welcomed the new investment saying: “We are very happy with the outcome of this transaction. The strength of interest we received demonstrates the level of investor confidence in our plans and the continuing attraction of the affordable housing sector as a competitive investment destination.”

SNG announced that the bond received significant investor interest and was nearly four times oversubscribed. It has a 33-year maturity, marking the first long-dated bond issued in the sector since November 2022.

The bond was priced at 108 basis points, with an all-in rate of 5.603%.