Quintain raises cheap debt via government second PRS bond sale

Venn Partners has sold its second PRS bond, at tighter pricing than the first issued three weeks ago.

The £39.4 million financing, secured on assets owned by Quintain at Wembley Park, was sold under the £3.5 billion Private Rented Sector Housing Guarantee Scheme managed by Venn for the government.

It priced at gilts + 0.44 percent, which Richard Green of Venn Partners said was “slightly tighter pricing” than the first bonds sold.

Last month, Venn launched a first, £265 million 10-year bond issue, selling £175 million to investors and to fund loans.

The investment manager retained £90 million to sell at a later date to fund future loans and Venn explained that it is part of that £90 million which has been sold to finance the loan to Quintain.

The property company, now led by chief executive Angus Dodd since its acquisition by Lone Star, will use the very competitively-priced capital to refinance Emerald Gardens, 141 PRS flats in two buildings at its Wembley Park estate in north London.

The flats, operated under Quintain’s Tipi brand, were leased within six months of launch at rents of about £20,000 per annum for two-beds. Another 415 Tipi homes will be launched over the next two years at Wembley.

Angus Dodd said: “It is fantastic to be part of this government programme to support PRS; we are delighted to have been awarded a share of this oversubscribed bond.

“The refinancing will enable us to recycle capital to continue the development of Wembley Park and look ahead to the completion of our next PRS buildings in 2017 and beyond.”

Green said that the £3.5 billion government scheme has received applications for almost £2 billion of loans but pointed out that it remains open for another year: “We encourage PRS operators to continue to apply.”

Last month Venn managing partner Paul House said more than £700 million of loans had been approved.