Clergy retirement housing: £100 million bonds issued
The Church of England Pensions Board (”the Board”) has announced that it has issued £100 million of bonds, giving it access to long-term finance to purchase additional retirement properties, which will secure the future of clergy housing in retirement.
The bonds are repayable in tranches between 2038 and 2048 and were issued through a special purpose vehicle, CHARM Finance plc. £70 million of the bonds were placed immediately, and the remaining £30 million retained to provide quick access to the capital markets if required in the future.
The Board is using part of the bond proceeds to acquire, in a single transaction, the economic interest in 196 properties in the Church Housing Assistance for Retired Ministers (“CHARM”) scheme which had been financed by the Church Commissioners. This is part of a long term strategy to keep or acquire properties that are most suitable for the rental scheme, replace others as they become vacant, and add further properties to give retiring clergy a wider choice as they approach retirement.
Dr Jonathan Spencer, Chairman of the Church of England Pensions Board, said: “The Board is committed to ensuring that it can continue to provide those retiring clergy who need it with affordable housing in retirement. We decided the time was right to look at long term capital finance to help secure the future of the retirement housing (CHARM) scheme. This is the next step on our journey to build a portfolio of properties that will continue to meet future expected clergy demand.”
Alan Fletcher, Chair of the Board’s Housing Committee, said, “This new long term financing arrangement will bring greater certainty over borrowing costs, by taking advantage of the current low interest rate environment. This will not only enable us to sustain the essential financial support for CHARM that the wider Church continues to provide for future generations but will also enable the Board to widen the choice of properties available to members of the clergy who need to use our services as they approach retirement.”
The transaction was arranged by TradeRisks Ltd with Pension Insurance Corporation plc (“PIC”) as the sole investor.