Care home charity to fund expansion with £30m retail bond
ELDERLY care has become one of the critical issues facing the Government, specifically how to fund it and ensure people can live in dignity in their old age.
Chancellor Philip Hammond pledged £2billion towards social care in his Budget last week, and a green paper looking into the issue. He could gain some inspiration from residential home group Greensleeves, a charity that launched an innovative transaction last week to fund elderly care.
Greensleeves has launched a bond issue, to be listed on the Stock Exchange’s retail bond market and paying annual interest of 4.25 per cent. Proceeds will primarily be used to fund expansion, upgrade existing homes and pay down bank debt.
Greensleeves has 20 homes catering for 800 residents, but chief executive Paul Newman formed an ambitious plan in 2013 to double residents from 500 to 1,000 by 2023. He is on track to meet that target by next year.
This is not growth for its own sake, as Greensleeves is a non-profit body that invests surplus funds in its homes and services.
About 75 per cent of residents are privately funded – paying an average of £800 per week – while 25 per cent are local authority funded. There is no difference in care and residents who run out of money are kept on regardless. The strategy works and 85 per cent of the group’s homes are rated good or outstanding by the Care Quality Commission.
Newman is a keen supporter of the so-called Eden Alternative, an approach to elderly care that encourages employees to focus on companionship and interest in older people. Residents feel better cared for and staff feel more committed, too.
Greensleeves hopes to raise up to £30million via its bond issue, there is a minimum subscription of £500 and the offer is expected to close on March 24 (or earlier if demand is high). The bonds will mature in 2027 but they can be traded at any time on the retail bond market.
Midas verdict: Running care homes is not easy but Greensleeves has proved itself. From an investment perspective, these bonds offer a decent return. Investing will also help a charity address a critical social issue.
Traded on: Retail bond market Ticker: GSHT Contact: greensleeves.org.uk or 020 7793 1122
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