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Bromford has agreed a £100m private placement with Legal & General’s LGIM Real Assets arm.
The 44,000-home association, which operates in the Midlands and South West of England, said the funds, which will be drawn down in 12 months’ time at current rates, will help deliver 12,000 homes by 2028.
Imran Mubeen, head of treasury at Bromford, said the organisation is taking a proactive approach in order to ride out the uncertainty brought by COVID-19, by locking in funding now and resuming development work.
He said: “We already benefitted from exceptionally high levels of liquidity and while there was no immediate requirement for new funding at this stage, this deferred deal reflects our proactive approach to the market: locking in long-dated funding at historically low rates to future-proof our new homes plan while matching future interest costs with our required liquidity profile.”
Bromford pointed to its year-end results which showed development of 1,000 new homes but also revealed a 23% drop in its surplus.
The organisation also agreed its first debt facility with an environmental, social and governance focus early this year and vowed to carry out more sustainability-linked deals in future.
Steve Bolton, head of private corporate debt – Europe at Legal & General, said: “Our investment in Bromford matches our extended liabilities and delivers both real economic growth and social value for the UK.
“We’ve seen lots of change in the past few months, but the fundamental need for good-quality homes remains a constant. There is an urgent need to provide stable homes for millions of households on waiting lists and partnerships like this will help deliver on that need.”
NatWest Markets acted as sole agent in the deal while legal advice was provided by Trowers & Hamlins and Addleshaw Goddard.