Carduus fund-raising ‘not hit by downgrade’

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Social housing finance company Carduus has confirmed it will press ahead with the launch of a £200 million bond in the autumn, adding that the recent downgrade in the UK’s AAA rating made “no material difference” to its programme.

The Glasgow-based company, which expects to raise £1 billion over the next three years, said it now has “sufficient levels of interest” among Scottish registered social landlords to raise finance from capital markets following a series of roadshows.

Managing director Brian Gilmour confirmed that the downgrade in the UK’s credit rating by Moody’s last week would not affect its ability to raise finance, which is partly based on the government’s ability to borrow.

Gilmour said: “The changes in the UK government’s rating, whilst embarrassing for the government, has made no material difference to our programme. It appears that the reduction from AAA to AA1 status of the UK government was expected by the City and this had actually been priced into bond rates.

“For example, UK 20-year gilt rates are actually 0.15 per cent lower this week with the AA1 rating than they were last week with the AAA rating.”

The company, backed by 
venture capital firm Bridges Ventures, estimates the funding it raises for social landlords could fuel the building of 200,000 homes in Scotland.