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Two more housing associations secure £150m through Bank of England’s COVID-19 financing scheme
Platform Housing Group and Flagship Group have sold a combined £150m of short-term debt to the Bank of England (BoE) via its Covid Corporate Financing Facility (CCFF) to help navigate the economic impact caused by coronavirus.
Platform and Flagship, which own and manage more than 70,000 homes combined, became the third and fourth social landlords to access the scheme since it was launched in March, taking the BoE’s total holdings of housing association short-term debt to £600m.
Midlands-based Platform raised £100m while Flagship, which operates in the East of England, sold £50m to the bank.
The CCFF was set up to help investment grade-rated organisations that make a “material contribution” to the UK sell short-dated unsecured commercial paper.
Data released on Thursday last week shows that a total of 64 companies have accessed the CCFF, with the BoE purchasing £18.6bn of paper.
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Initially only large housing associations with a V1 grading for financial viability from the Regulator of Social Housing – the highest possible grade – were eligible for the scheme. But the BoE has since revised its framework to allow V2-rated associations to apply. Platform and Flagship are both graded V1 for financial viability.
Rosemary Farrar, chief finance officer at Platform, told Inside Housing: “Platform’s board was clear at the start of the COVID-19 crisis in March that it wanted our liquidity to be maximised to cover the risk of all eventualities, and this fund has allowed us to continue to operate our day-to-day operations and to build out our extensive development programme of new affordable homes which will support the wider economy.”
Ms Farrar said the funds will be held for just under a year and will enable Platform to access further debt at a lower rate over this period.
David Armstrong, chief financial officer at Flagship, said: “In light of the difficult circumstances and potential decline in sales and rental income streams, this [the CCFF] has been a huge help.
“The funds have allowed us to reduce short-term risk, continue with our ambitious new build programme, and achieve our goal to solve the crisis in the East of England.”
The housing associations follow L&Q and Optivo, which were the first landlords to access the scheme for £300m and £150m respectively.
The CCFF scheme was set up alongside the extension of the BoE’s existing Corporate Bond Purchase Scheme, which was increased from £10bn to £20bn by chancellor Rishi Sunak.
