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Welsh housing association borrows £50m
A North Wales housing association has borrowed £50m through its first private placement deal.
Grŵp Cynefin, which owns around 3,600 homes, has issued the bond to BAE Systems Pension Funds Investment Management (BAPFIM).
The 30-year placement will be drawn down in three separate tranches, with the last deferred until July 2021.
The association, which operates across North Wales and in north Powys, will use the money to refinance four existing facilities as it looks to rationalise its loan portfolio in a bid to cut funding costs and increase the weighted average life of its debts.
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Centrus, which advised on the deal, said the loan has been secured at a “highly competitive interest rate” and that the long life will help Grŵp Cynefin “reduce market risk during a period of expected volatility”.
Bryn Ellis, business services director at Grŵp Cynefin, said: “Our long-term treasury strategy is always prepared for some volatility but this new funding improves our ability to manage liquidity and interest risks going forward.
“Grŵp Cynefin is now in a strong position to deliver on our corporate plan objectives and address treasury risks for the future.
“The proposal from BAPFIM was very attractive to Grŵp Cynefin as we always aim for a high level of current and forward-looking liquidity.”
David Cryer, head of liability driven investments and private placements at BAPFIM, said: “We are delighted to be providing Grŵp Cynefin with a long-term funding solution, which reflects our continued commitment to the sector and demonstrates our flexibility in meeting Grŵp Cynefin’s drawdown requirements.”
Grŵp Cynefin has plans to build 400 homes by 2021.
