ao link
Twitter
Facebook
Linked In
Twitter
Facebook
Linked In

You are viewing 1 of your 1 free articles

Welsh housing association completes £250m refinancing

One of biggest housing associations in Wales has completed a £250m refinancing, which it hopes will help it deliver more than 900 new homes over the next five years.

Linked InTwitterFacebookeCard
Picture: Getty
Picture: Getty
Sharelines

Welsh housing association completes £250m refinancing #ukhousing

@CoastalHousing has completed a £250m refinancing, which it hopes will help it deliver more than 900 new homes over the next five years #ukhousing

Coastal Housing Group has secured its first institutional private placement with Aviva Investors, on behalf of Aviva Life, as part of the refinancing.

It will borrow £60m from the insurance and pensions giant.

Swansea-based Coastal, which owns and manages around 6,000 homes, has also agreed a £50m revolving credit facility with existing lenders.

The landlord’s legacy treasury portfolio has been simplified, with the number of active finance partners reduced by two.

Longevity has been increased by 25% and the weighted average cost of capital has been reduced by 10%, it said.

Simon Jones, executive director of finance at Coastal, said: “This is the largest refinance that Coastal has carried out, and to deliver it in the current environment is testament to the hard work of everyone involved within Coastal, our advisors and our funders.

“We are delighted to be working with Aviva, who demonstrated a strong understanding of our business, our social purpose and strategic goals. We are also pleased to continue working with key funding partners while reducing the number of active relationships we have.

“It was important to us not only to take advantage of current interest rate conditions, but also to ensure that our funding portfolio was fit for the longer term.

“We have now achieved this with a portfolio consisting of strong funder relationships and harmonised, up-to-date covenants. We have also increased our proportion of fixed rate debt while providing new liquidity for the medium term.”


READ MORE

Bank pledges £3bn worth of funding to housing associations over next three yearsBank pledges £3bn worth of funding to housing associations over next three years
Cardiff-based housing association agrees £62m financing dealCardiff-based housing association agrees £62m financing deal
G15 landlord secures £150m via mix of UK and North American private placementsG15 landlord secures £150m via mix of UK and North American private placements
Investment firm launches new partnership targeting shared ownership marketInvestment firm launches new partnership targeting shared ownership market

Munawer Shafi, head of structured and private debt at Aviva Investors, said: “This transaction demonstrates our ability to structure bespoke funding solutions, aligned to counter-party businesses and investors’ needs.

“The counter-cyclical nature of social housing, coupled with high relative value and a strong regulatory underpinning, make it an attractive sector in the current environment.

“This deal fits well with our strategy of investing in long-dated predictable cashflows, which aim to offer attractive risk adjusted returns to our investors.”

Centrus acted as the sole financial advisor to Coastal, while Devonshires advised on the corporate and financing aspects, Blake Morgan advised on the property security elements, and Addleshaw Goddard acted as investor counsel.

John Tattersall, director at Centrus, said: “Coastal delivers high social impact, and this complex transaction repositions treasury arrangements to optimally support the ongoing delivery of new homes and services over the next five years.

“Risk management has been enhanced, borrowing costs minimised and overall financial resilience maximised. This outcome is very strong. It demonstrates the ongoing attractions of the social housing sector to long-term investors and it is great to see Aviva entering the Welsh market.

“It is also a product of the continued support of key banking partners who have reaffirmed their commitment to the sector.”

Sign up for our development and finance newsletter

Sign up for our development and finance newsletter
Linked InTwitterFacebookeCard
Add New Comment
You must be logged in to comment.