Care home investment bond set to pay 5 per cent
LONDON: An opportunity to invest in the care home market is on the market in the form of a bond offering 5%. The underlying investment is a charity called Greensleeves Homes Trust, hence the Greensleeves Homes Trust 5% Bonds due 2030.
The Bonds will be issued by Retail Charitable Bonds, a special purpose issuing vehicle created to connect charitable organisations seeking unsecured loan finance with investors looking for fixed income bonds listed on the London Stock Exchange. The funds raised will be loaned, via a loan agreement, to Greensleeves Homes Trust.
The Bonds have a minimum initial subscription amount of £500 and are available in multiples of £100 thereafter. They are available to wholesale and retail investors and will pay a fixed rate of interest at 5% per annum until 17 December 2030, payable twice yearly on 17 December and 17 June of each year, with the first coupon payment being made on 17 June 2021. The Bonds are expected to mature on 17 December 2030 with a final legal maturity on 17 December 2032.
At any time during the life of the Bonds, investors are permitted to sell the Bonds on the open market through their stockbroker. The Bonds are available through stockbrokers AJ Bell, Equiniti Financial Services Limited and Redmayne Bentley LLP.
The offer period is expected to close at 12 noon on 11 December 2020. This is the second time that RCB has launched a bond offer for the Charity. The first issue in 2017 raised £50 million for the Charity. This is the tenth series of bonds to be launched by RCB, following successful previous issues for Golden Lane Housing, Hightown Housing Association, Charities Aid Foundation, the Charity, Dolphin Living, Belong and The Alnwick Garden Trust. In total the bonds have raised over £225 million since 2014.
Allia C&C is lead manager on the issue.
Greensleeves Homes Trust is a growing charitable organisation, which provides care for older people with over 1,000 bed spaces across 25 residential, dementia and nursing homes across London, South and East England and the Midlands.
The Charity commenced operations in 1997 when the Women’s Royal Voluntary Service (“WRVS”) decided to transfer the ownership and management of its care homes to an independent organisation. The newly formed Charity took its name from the green arm bands (or sleeves) worn by WRVS volunteers during World War II.
As an organisation, the Charity says it is constantly adapting to meet the needs of older people. It introduced the Eden Alternative approach to care, a framework designed to improve the quality of life for residents at all of its care homes. The framework is based around the core belief that ageing should be a continued stage of development and growth, rather than a period of decline, working on the ethos that older people, even those experiencing memory loss, can still exercise a positive influence over their own lives. It says the philosophy encourages Greensleeves’ staff to be creative when giving care, creating vibrant communities where contact with children, the outdoors and animals is central to the home.
The Charity says trading surpluses are reinvested back into the Charity – generating a sustainable surplus means that the Charity says it is able to offer a home for life to its residents, meaning that it has a policy of offering a home in perpetuity to all its residents irrespective of how they are funded.
The Charity seeks to operate a sustainable business model and balances its resident funding accordingly. Historically, a mix of 75% privately funded and 25% publicly funded residents
has been considered appropriate. The Charity is therefore less reliant on public sector funding than many other care home operators.
Unsurprisingly, Greensleeves has faced the impact of covid-19. It reports that there have been covid-19 outbreaks in a number of the Charity’s homes and corrective action was been taken to mitigate the impact. The Charity says to the best of its knowledge, no covid-19 outbreaks were recorded between mid-May 2020 and 30 September 2020 and following 30 September 2020, and as of 20 November 2020, there have been two further outbreaks – an outbreak being defined as two or more staff and/or residents in any one of the Charity’s homes having tested positive for covid-19.
Occupancy levels fell as a result of the initial wave of the covid-19 pandemic by approximately 9% from the level at 31 March 2020 but have since steadily recovered reaching 86% as at 30 September 2020.
Paul Newman, chief executive of Greensleeves Homes Trust, said: “Our focus is to provide residential, dementia and nursing care, comfort and security to older people, at a price that reflects our charitable status. During the past year, we cared for over 1,300 residents and employed and developed over 1,500 staff. Reflecting the critical role that our homes can play in supporting elderly residents and their families and the substantial demand-supply imbalance characterising the UK care home sector, we have significant ambitions to scale our offering and remain committed to expanding and modernising the care and support we offer.
“As a result of the emergence of covid-19, in common with most other adult social care providers within the care homes sector in the UK, various aspects of the Charity’s business have been affected. Despite this, the portfolio has performed well during the year, and has thus far demonstrated clear resilience and we look to the future with confidence.”
Adrian Bell, chief executive officer of Allia C&C, said: “The provision of high-quality later life care is part of the fabric of our society and Greensleeves Homes Trust has been positively impacting on the lives of not just residents but also their families for nearly a quarter of a century.”
