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Japanese bank and pension fund loan £75m to Sanctuary
Sanctuary Housing Group has received a £75m loan facility from a Japanese bank and a pension fund which recently struck a deal with another large housing association.
The revolving credit facility (RCF) will be provided by Mitsubishi UFJ Financial Group (MUFG) and BAE Systems Pension Funds Investment Management for three years, during which time Sanctuary will have the option to draw from the loan as needed and make payments on the debt to replenish it.
After three years, BAE Systems will provide the £75m again as a private placement note.
Less than two months ago, the same two investors provided a similar loan of £50m to Network Homes.
This is MUFG’s 11th transaction in the social housing sector, bringing its level of commitment to £705m. The Tokyo-based bank is 350 years old and based in 50 countries.
Sanjay Narbheram, director of housing finance in EMEA at MUFG, said: “We at MUFG are very pleased to be working with Sanctuary, and this funding solution is a great way to commence our relationship.
“Since designing this RCF structure we have seen healthy demand from housing associations. It is our belief that this solution-based model could transform the funding landscape for social housing, because associations are increasingly telling us that they need the benefits of both short-term flexibility and long-term funding commitments.”
Tony King, group treasurer at Sanctuary, added: “Sanctuary is delighted to conclude its first funding arrangement with MUFG and as part of this, further develop its existing relationship with BAE Systems Pension Fund.
“Incorporating it within Sanctuary’s existing group treasury structure makes it efficient in terms of our operations and security, and it will assist in funding the group’s ambitious development programme to build more than 30,000 new homes in England and Scotland by 2027.”
