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Hyde adds American banking giant to funders as part of finance restructure

A large London-based housing association has brought American bank Wells Fargo and the National Australia Bank into its strategic funding group as part of an ongoing finance restructuring programme.

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Picture: Getty
Picture: Getty
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Hyde adds American banking giant to funders as part of finance restructure #ukhousing

@HydeHousing sets out its 30-year strategic plan #ukhousing

@HydeHousing, which owns and manages 49,000 homes, has brought American bank Wells Fargo and the National Australia Bank into its strategic funding group as part of an ongoing restructuring programme #ukhousing

Hyde Group, which owns and manages around 49,000 homes, outlined its 30-year strategic plan in a stock market note after a regulatory judgement on Wednesday confirmed it has retained a G1/V2 rating for governance and financial viability.

Rod Holdsworth, chief financial and resources officer at Hyde, said: “We are part way through a large interest rate restructuring programme that will deliver a significant reduction in our future interest costs and lower our cost of capital.

“In March we reset and closed out £105.5m of derivatives at a cost of £39.1m. This will provider net interest savings of £4.05m in 2020/21. This takes out debt weighted average cost of capital to 4.27% having reduced from 5.52% three years ago.”


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Mr Holdsworth said that with the backing of the two international banks the group has increased its facilities by £150m, with an average term of more than eight years.

“As a result of these new facilities, we had £700m undrawn facilities at 31 March 2020,” he added.

Hyde became the first UK social housing provider to receive a backing from Wells Fargo – the largest commercial property lender in the US – in January, when it received a £50m loan.

Hyde plans to use a mixed-funding model to develop homes in the future including debt funding, partnerships and joint ventures with house builders, local authorities, other associations and third-party institutional investors.

In Wednesday’s judgement, the Regulator of Social Housing said the “new and innovative” funding strategy “exposes Hyde to material financial risks, some of which may be outside its control”.

Mr Holdsworth said: “While this expanded approach is somewhat new to the social housing sector, it will be underpinned by good financial management – we will continue to maintain our financial strength and stability by being efficient and through prudent planning and investment.”

The G1/V2 grading indicates the top rating for governance and compliance with the English regulator’s financial viability requirements, albeit with a need to “manage material risks to ensure continued compliance”.

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