Mutual secures £529m deal after roadshow

YORKSHIRE Building Society has issued £529m (750m euros) of seven-year senior unsecured funding in its latest deal with institutional investors.

The mutual staged a three-day “roadshow” across the UK, Netherlands, France, Germany, Denmark, Sweden and Finland last week.

A spokesman said: “The initial price guidance saw the society reach a book size of EURO 1.3bn, nearly two-times over-subscribed, from more than 90 institutional investors, but the market was slightly weaker so some of the orders were not at the targeted price.”

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The spokesman said that pricing was tightened, which initially led to a small drop in the book size, but this still allowed the society to achieve its target amount of EURO 750m A-/Baa1 rated notes from 73 institutional investors.

Andy Caton, Yorkshire Building Society’s chief corporate affairs and treasury officer, said: “We were delighted with the deal. It diversifies our funding and provides long-term finance at a cost effective level, which we are then able to pass on to customers by providing further good value mortgages.

“Yorkshire Building Society has a long established franchise of investors spread across the UK, the euro zone and the Nordic countries.

“This deal builds on the success of our re-entry into the senior public bond markets in 2014, this time with a longer term, seven-year, transaction.”

Sixty eight per cent of the investors were from outside the UK, a spokesman said.

Fund managers accounted for 77 per cent of the bonds allocated, with pension funds taking 12 per cent and banks, central banks and private banks making up the remaining 11 per cent.