Allia C&C is pleased to announce the successful close of the 12th RCB transaction – a £50m issue for Charites Aid Foundation (CAF), with £30m bonds sold to meet its immediate requirement for funds and a further £20m held as “Retained Bonds” that can be sold to meet any further need for debt. In a period of increasing concerns over inflation and the risk of rising interest rates, this has enabled CAF to lock into long-dated fixed rate funding for the business.
The new bond has a coupon of 3.5% for a maturity of 10 years. It was launched at a margin of approximately 250bps to Government Securities, or about 100bps tighter than the first RCB issue for CAF.
Despite difficult market conditions, the new CAF bond benefited from strong demand from a wide range of retail and institutional investors. This allowed it to be closed early after two weeks. The deal was linked to a tender for CAF’s existing 5.0% 2026 bonds, showing the flexibility of the platform as a source of funding and allowing CAF to extend the maturity of its debt while reducing the coupon.
CAF is the fourth borrower to make multiple issues off the RCB platform, in all cases with the repeat issuance taking place at lower coupons and tighter spreads to gilts. RCB has now issued a total of £377m in 12 transactions on maturities of between 7 – 10 years.