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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 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.