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Japanese bank agrees £60m funding deal with major landlord
Midland Heart has secured a £60m finance deal with Sumitomo Mitsui Banking Corporation (SMBC), the second deal the Japanese bank has done in the sector in the past four months.
The 33,000-home housing association said that the money will be invested in its housing stock.
Midland Heart has also recently retained its A1 stable credit rating from Moody’s, having posted an operating surplus of £77m and an operating margin of 35% this year.
Anna Simpson, executive director of finance and resources at Midland Heart, said: “As a not-for-profit organisation that stays true to our social purpose of providing genuinely affordable homes, it’s very important that we can borrow on the best possible terms and give our customers good value.”
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She said she was encouraged that SMBC recognised the value of affordable housing to invest in.
“Not only do our homes have guaranteed occupancy and offer a very stable income for investors, they also serve an important social purpose in providing much-needed accommodation for families across the Midlands,” she added.
The deal is SMBC’s second in the sector in less than four months. In December, the bank signed a £100m facility with Clarion Housing Group that had a margin tied to Clarion getting a certain number of people into work each year – its first sustainability-linked loan.
It entered the UK housing association sector in late 2018, when it signed a five-year revolving credit facility with One Housing Group.
Fellow Japanese bank Mitsubishi UFJ Financial Group has also previously invested in the sector via deals with Anchor, Family Mosaic and BPHA, although it was more active around five years ago.
And last year, Japan’s biggest house builder Sekisui House announced it was moving into the UK market by partnering with Homes England and developer Urban Splash in a bid to increase the supply of homes in the UK using modern methods of construction.
