Allen & Overy said today the GBP265 million 10 year bond issuance from Venn Partners’ PRS Finance plc, the first as part of a government-guaranteed GBP3.5 billion debt issuance programme, represents a vital step towards improving standards and increasing choices for Private Rented Sector (PRS) tenants in the UK.

In September 2012 the UK government announced it would offer up to GBP10bn of debt guarantees to support the development of new housing. Of this, GBP3.5bn was allocated to the private rented sector. The purpose of the scheme is to unlock new investment by institutional investors to increase the supply of new, purpose built and professionally managed private rented sector homes.

The bonds were sold with a coupon of 1.75% and the proceeds will be used to in order to finance lending to selected private rented sector operators, providing them access to long term loans that will increase the investment viability of projects to develop new private rented sector homes.

A&O advised RBS and HSBC as joint lead managers and U.S. Bank as trustee on this transaction and previously advised RBS, Barclays and HSBC as dealers on the establishment of the debt issuance programme in 2015.

“The UK’s housing crisis has been well documented and the private rented sector has the potential to play an important role in alleviating it,” said London capital markets partner Geoff Fuller. “It’s encouraging to see how well these bonds have been received, particularly against a difficult economic backdrop.”