Sage Homes raises £270 million for affordable housing

Sage Homes, England’s largest provider of affordable new homes for four successive years, has raised £270 million via a social and sustainable CMBS bond.

The bond was arranged by Goldman Sachs alongside Barclays. Second party opinion by Sustainalytics confirms alignment with the Sustainability Bond Guidelines 2021, Green Bond Principles 2021, and Social Bond Principles 2021, as administered by ICMA, and the Green Loan Principles 2021 and Social Loan Principles 2021, as administered by LMA, APLMA, and LSTA.

It is the first European residential CMBS issuance since Sage's second CMBS in 2021
The bond refinances 1,609 homes currently secured via a CMBS issuance priced in 2020, alongside the refinancing of 514 additional similarly built homes currently secured against a bilateral loan facility with Morgan Stanley Bank, N.A.

The refinancing takes the form of a loan made to a subsidiary of Sage Rented Limited (one of Sage’s RP’s) by Sage AR Funding 2025 No.1 PLC, which is secured against a £270M / 5+1+1 Yr loan at SONIA + 220bps.

The new social and sustainable bond reinforces Sage’s commitment to sustainability, including efforts to drive energy efficiency in the affordable homes it delivers. Sage Homes has already delivered 19,000 affordable new homes, 98% of which have an EPC energy rating of A or B. With another 3,500 homes in its delivery pipeline the new bond will help the registered provider to continue to meet its sustainability targets as it strives to deliver 30,000 new homes by 2030.

John Goodey, Chief Financial Officer, said: “This successful raising of funds further highlights our commitment to innovate in capital markets, enabling Sage to build a sustainable business providing thousands of affordable homes across England. We are proud that this latest offering has received a sustainable, social and green bond designation, following our previous one in 2021, which was the first of its kind in Europe. This further demonstrates Sage’s commitment to leading the sector on sustainable housing delivery.”