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Large London housing association completes £235m refinancing
One Housing Group has completed £235m of new finance, including the introduction of a new Japanese bank to the sector, Inside Housing can exclusively reveal.
The 16,000-home housing association struck new deals with Irish, Japanese and UK banks, including the first direct loan to the UK social housing sector from Japanese bank Sumitomo Mitsui Banking Corporation.
It is part of the organisation’s drive to increase its liquidity in response to the current market uncertainty, it said.
The large London housing association has completed £150m worth of revolving credit facilities, amended and extended its existing revolving credit facilities by £85m and brought in over £25m of new project finance.
The new agreements were provided by the Japanese banks Mitsubishi UFJ Financial Group (MUFG), which has carried out several recent deals with the sector, and Sumitomo Mitsui, as well as by Yorkshire Building Society.
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Sumitomo Mitsui’s New York subsidiary, SMBC Nikko Securities America, acted as the sole placement agent for a £200m private placement to Sanctuary Group in March but this was its first direct loan to a British social landlord.
Existing loans, meanwhile, were increased and extended by One Housing with its lenders Allied Irish Bank and Royal Bank of Scotland.
The association also obtained project finance for specific development schemes from UK bank Close Brothers, the Royal Bank of Scotland and the Greater London Authority.
Paul Rickard, chief finance officer at One Housing, said: “This further strengthens the liquidity of One Housing to help us deliver 5,000 new homes over the next ten years as well as protecting us against the current uncertain operating environment. We expect to build on this with additional fundraising in the near term.”
One Housing joined the G15 group of large London housing associations in June and plans to build more than 5,000 homes over the next 10 years.
Sanjay Narbheram, director of housing finance at MUFG, added: “This is a pivotal moment for One Housing Group, and being able to provide financing at a time of strategic growth is clearly in line with MUFG’s objective to support the UK social housing sector with building new, affordable homes. We look forward to supporting One Housing Group’s strategic growth in the future.”
MUFG entered the social housing sector in 2015 and has been lending to housing associations on a regular basis since then.
In May, it closed two deals with large London housing associations Southern and A2 Dominion worth a total of £125m.
Update: at 10.11 on 29.10.18 This story was updated to clarify that the £235m is new finance, not refinancing.
Update: at 14.21 on 7.11.18 This story was updated to clarify that SMBC Nikko Securities America did not lend directly to Sanctuary, but acted as sole placement agent.
