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Pension insurer lends housing association £65m
The pension insurer Pension Insurance Corporation (PIC) has lent £65m to the Durham-based housing association Livin Housing.
It provided the funds in a private placement, meaning the association chose to sell bonds directly to PIC rather than on the public markets.
Livin, the largest owner of social housing in County Durham, plans to use the money to build affordable homes and refinance existing debt to reduce interest costs.
The 8,400-home social landlord, which was formed through a stock transfer from Sedgefield Borough Council in 2009, split the £65m into three tranches, which will have to be paid back in 2055, 2057 and 2058.
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The pay back dates will match the times when PIC’s pension liabilities have to be paid, a time when it is difficult for the firm to borrow from the public bond markets.
After this loan, PIC has brought its total investment into the social housing sector up to almost £1.5bn, following a similar private placement worth £100m to the housing association Accord last year.
Sean Brodie, executive director of finance and development at Livin, said: “We are delighted to have achieved such a positive outcome. The board have established a clear vision for the future of our business and the new funding arrangements provide an excellent platform from which we can invest further in providing great homes and sustaining strong communities.
“We are grateful to [consultancy] Centrus for their invaluable support throughout the process, and to Lloyds, AIB [Allied Irish Banks] and PIC for their continued commitment to the sector and for helping us to achieve our social aims.”
Marno Jooste, debt origination manager at PIC, said: “We are very pleased to have worked with Livin and Centrus on this transaction.
“We have been able to agree on a funding agreement which meets the needs of both parties, allowing the development of social housing while backing the payment of our policyholders’ pensions on a secured basis.”
