THE Church Commissioners have confirmed that they have raised £550 million in their first ever bond issue.
The bond issue is made up of a ten-year £250-million sustainability bond maturing in 2032, and a 30-year £300-million conventional bond maturing in 2052.
In the days before the official announcement, press stories referred to the bonds as “Cranmer bonds”, but this name is not used by the Commissioners. The Financial Times, reporting the story this week, described the current market for bonds as “shaky. . . Corporate bond issuance in Europe is down 16 per cent in the first half of 2022 compared to 2021,” the paper noted.
The Commissioners report, none the less, that their bond issue “received strong support from a broad range of institutional investors”. The bonds were rated Aa1 by Moody’s Investors Service, and will pay interest at a rate of 3.25 per cent and 3.625 per cent respectively. Bank of America, J.P. Morgan, and Morgan Stanley acted as joint bookrunners.
The Commissioners say that money raised by the sustainability bond will be used “solely to support existing and future eligible sustainable projects”. The 30-year bond will be a long-term investment, used alongside the returns from the Commissioners’ existing £10.1-billion holding to support their “long-term charitable objectives and investment goals”.
The Commissioners’ chief investment officer, Tom Joy, explained: “We turned to the bond market because of the attractive funding terms available for institutions like ourselves with long-term investment horizons. Our investment decisions are made on a responsible and ethical basis, and we will invest the proceeds in the same manner, consistent with our investment policy.”
The Church Commissioners’ chief executive, Gareth Mostyn, described the successful bond issue as “good news for our ability to continue to fulfil our objective to maintain and grow the Church Commissioners’ support for the Church of England’s mission and ministry over the long term.
“We are pleased to welcome new stakeholders in support of our activities and thank them for their investment.”
The vice-chair of the Commissioners’ board, Dr David Walker, Bishop of Manchester, cited a scriptural precedent: “In the Parable of the Talents, Jesus commended enterprise and investment. Following his guidance, the Church Commissioners seeks to be a responsible long-term steward of the Church’s endowment, using the returns to support the mission of the Church of England throughout the country, especially in areas of particular need.
“Our decision to raise funding from the bond market has been taken to help us to further that mission.”
The General Synod this weekend will debate the latest triennium spending plans covering 2023-25 (News, 11 May). A strong investment performance over the past decade, combined with challenging conditions for dioceses, led to an announcement that the Commissioners would contribute £1.2 billion during the next triennium, amounting to about 20 per cent of the Church of England’s income.