Southern secured bonds
The transaction marked Southern Housing’s debut issue in the sterling fixed-income market following the merger between Optivo and Southern Housing Group. It was executed under Southern’s newly established EMTN Programme, which facilitated quick and efficient access to the market.
Southern was extremely well prepared for this transaction, ensuring investors had access to the latest financial, credit, and regulatory information. Notably, the recent upgrade to G1 was well-received and drew positive commentary from several investors.
Although Southern was ready to be guided by investor demand on tenor, they proactively expressed a preference for a 30-year maturity to address the undersupply of sterling issuances at the long end of the market. The transaction was launched with a two-day execution process.
Southern’s management team actively engaged with key players in the sterling bond market through an online Deal Roadshow and group calls, which generated strong interest from investors.
Benefit to the client
The transaction launched with an Initial Pricing Thoughts (IPT) of G+135 basis points, and the order book expanded to approximately £900 million. As the transaction progressed, pricing tightened to G+120 basis points, with the book being approximately 2.5 times oversubscribed.
Since no Southern bonds were outstanding, the pricing strategy referenced the Optivo and SHG bonds. The new Southern transaction was priced at a small premium to Optivo and inside the SHG curve.
Newbridge role
Newbridge played a key role in advising Southern on their broader capital markets strategy, assisting from the establishment of the EMTN Programme through to the execution of this successful transaction.
