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Japanese bank Mitsubishi UFJ Financial Group (MUFG) has closed two loan deals with large London housing associations worth £125m in total.
Southern Housing Group borrowed £75m and A2 Dominion borrowed £50m, both of which were revolving credit facilities.
This means the associations paid an initial fee to the bank for the right to use the funds whenever needed, with an ongoing commitment fee for unused funds.
Sanjay Narbheram, director of housing finance for Europe, the Middle East and Africa at MUFG, said: “MUFG are pleased to be able to support these two organisations meet their aspirations to build much-needed new homes.
“We all share an ambition to support housebuilding across the UK and we were delighted to support Southern Housing Group and A2 Dominion Group at an important time for both businesses.”
This is the latest deal MUFG has struck in the social housing sector since entering it in 2015. The bank made a series of loans to housing associations last summer. It has not announced any further deals since then, but a source close to the bank said it had made a few deals with associations in the intervening period that had not been made public.
James Francis, finance director at Southern Housing Group, said: “We have been working closely with new and existing lenders on building the capacity and liquidity to further our social objectives. This deal with MUFG represents an important milestone in the process.”
Dean Tufts, executive director of finance and strategy at A2 Dominion, added: “Our facility with MUFG will enable us to take on more development opportunities. We aim to provide around 6,000 new homes in the next five years and this funding will help us achieve this.
“We are delighted to work with MUFG, whose experience and skills have made this process very easy.”
Update: at 16.42 on 17.5.18 This story was updated to include information obtained from sources about MUFG’s previous deals.