The Aa3 rated secured bond, due June 2042, was sold by bookrunners Barclays, Lloyds and Royal Bank of Scotland at 250bp over the 4.5% December 2042 Gilt.
The issuer raised the money it wanted, but one banker said: "I see a lot of investor resistance to these housing association deals now. There have been too many and it’s time to have a break. I think the spread is wider than people were expecting."
The book was about £300m and the leads were not able to tighten the spread from guidance. However, one said the bond broke free to trade 2bp tighter at 248bp bid. It was priced at par to yield 5.486%.
The last housing association issue, on May 22, was also a debut rated Aa3. Saxon Weald’s 30 year bond drew a book of about £350m, enabling it to sell its maximum target size of £225m and price 2bp inside guidance at 248bp over Gilts.