Investors snapped up almost $180 million in high-yield bonds this week, sold to finance an expansion of The Villages, a 57,000-acre retirement community in Florida. The bonds, issued Tuesday, were priced at nearly one percentage point higher than the benchmark for a slug of bonds maturing in 10 years, with a yield of 4.7%, according to data compiled by Bloomberg.
The unrated deal appeared to price at yields below where other high-yield securities are trading, a sign of strong demand for the offering. The yield-to-worst on the Bloomberg high-yield index is 5.93%.
The proceeds will be used to finance the community's ongoing expansion by adding 3,860 new residential units. The funds will not be used for recreational amenities, including championship golf and recreation centers, according to the district manager of the Village Community Development District Number 16, which issued the bonds.
Located about an hour's drive north of Orlando, The Villages is seeking to grow its population to over 260,000 retirees with more than 130,000 homes over the next two decades.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing