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Red Kite secures £60m private placement
A 6,000-home housing association has raised £60m in its first private placement deal from a single UK-based investor.
Red Kite Community Housing announced the loan from the Pension Insurance Corporation (PIC) this morning, which it will use to refinance its old loans and reduce its funding costs by £1m per year.
The deal was said to be “a significantly more flexible arrangement” which will allow Red Kite to pursue its long-term development plans.
It is structured in three £20m tranches with maturities of 2030, 2033 and 2040. The first two have been drawn immediately and the third will be drawn in a year’s time.
Ray Prior, group director of resources at Red Kite, said: “We are incredibly pleased to have secured this new funding arrangement on such competitive terms, which gives us everything we need to deliver on our ambitious plans.”
Financial risk advisor JCRA advised Red Kite on the funding raised through the private placement and the banking market, while Natwest Markets acted as sole agent.
PIC specialises in securing the liabilities of defined benefit pension schemes. As of year-end 2016, it had £22.6bn of assets and insured 134,900 pension fund members.
It has previously invested in private placements with housing associations.
