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Case Study

£400M sustainable bond issue for PA Housing

May 7, 2021


A case study of how Chatham advised PA Housing on its first sustainable bond issue, developing a sustainable finance framework and targeting ESG investors.

Key goals

  • PA Housing owns and manages over 23,000 homes across the Midlands, London, and the South East.
  • PA Housing last approached the capital markets in 2015, issuing its inaugural £250M 2047 3.625% bond.
  • PA Housing has an objective to build an average of 600 homes per year to 2030, doubling from its current levels.
  • To support its development programme and sustainable investment in existing homes, PA Housing was seeking further long-term funding from the capital markets.

Our approach

  • Chatham was appointed to advise PA Housing; an element of the mandate was to reset the trading performance on its capital market debt to reflect the quality of its credit.
  • Chatham assisted PA Housing in developing a sustainable finance framework and supported PA housing on attaining a second party opinion (SPO) from Sustainalytics.
  • Chatham made recommendations to PA Housing on the selection of joint lead managers, particularly focusing on those with strong credentials in ESG-linked issuance and a commitment to repricing its credit spread.
  • Chatham advised on the structure of the issue, including timing of the launch and the choice of an intermediate maturity to optimise pricing among ESG-focused investors.


  • The £400M 15-year sustainable bond, of which £100M is retained, was priced at a spread of 87 bps over gilts, to give an all-in cost of debt of 2.0%.
  • This represented a 23 bps improvement from the opening initial price talk (IPT) and a discount of 22 bps to the secondary market bid spread on the existing 2047 bond on the day of issue.
  • Following the management presentation, the spread had already improved by 15 bps, resulting in final pricing which was 37 bps inside the initial spread on the existing bond.
  • The bond issue attracted outstanding investor demand. The orderbook was more than three times oversubscribed, with over 60% of orders from offshore investors.

This was an extremely successful transaction for PA. Chatham provided strong support throughout the planning and execution phases, giving valuable strategic insight into target pricing and measures to positively influence investor appetite. Chatham was also closely involved in the design of our Sustainable Finance Framework, a key component of the transaction which enabled us to share our ESG credentials with the investor community.

Simon Hatchman, Executive Director - Resources, PA Housing


This material has been created by Chatham Financial Europe, Ltd. and is intended for a non-U.S. audience. Chatham Financial Europe, Ltd. is authorised and regulated by the Financial Conduct Authority of the United Kingdom with reference number 197251.