Blackstone-backed Sage Homes raises £550m in blockbuster refinancing deal

Excess funds will be used to help Sage, which owns and manages 17,500 homes via five for-profit registered providers, grow to meet its overall target to deliver 30,000 homes by 2030. The split between existing debt and new funding as part of the refinancing was not disclosed.

The CMBS issuance is a sustainability bond, and nearly all the homes Sage builds are rated Energy Performance Certificate A or B.

The CMBS’ rated notes were priced at an average of 142 bps over SONIA (sterling overnight index average), with a five-year term plus two one-year extensions.

Sage uses a developer entity, Sage Homes RP, to build new homes. Sage Homes RP has a large revolving credit facility that it uses to build homes and hold them in the short term before they are transferred to other Sage-owned providers, where long-term financing can be taken out against them.

Sage had already raised £583m through three CMBS deals since 2020 prior to the latest transaction. Last year Inside Housing Living revealed Sage’s second CMBS bond issuance, which was worth a total of £270m.

Sage Homes is currently England’s biggest for-profit affordable housing entity. It invested £353m in delivering 3,985 new affordable homes in 2024 and has delivered a total of 21,000 affordable homes since 2017, with a further 2,500 under construction.

Around 11,000 of Sage’s homes are affordable and social rent, with the remainder shared ownership. Most of its homes are purchased from house builders through Section 106 agreements, but it has also delivered around 4,100 ‘additionality’ homes, by buying non-Section 106 homes using grant from Homes England and the Greater London Authority.

Elizabeth Froude, who was previously boss of non-profit housing association Platform Housing Group, took over as Sage’s chief executive last month. Inside Housing interviewed Ms Froude in October about her career at Platform and plans for her new role at Sage.

Morgan Stanley and Deutsche Bank were the bookrunners for the latest CMBS deal. Savills conducted the valuation, while Situs Asset Management was the security trustee.