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Stonewater secures £100m new debt amid restructure
Stonewater has secured a £75m sustainability-linked loan from a Japanese bank alongside a further £25m from a domestic lender.
The 33,000-home landlord said the funding will be used to provide 6,000 new homes and undergo a company restructure, consolidating its five businesses into just three.
The £75m loan from Sumitomo Mitsui Banking Corporation (SMBC) includes an interest rate which is linked to sustainability performance. Stonewater’s environment, social and governance (ESG) targets include planting 3,000 trees, upgrading 350 properties to EPC Band C and installing 200 low-carbon heating systems.
A £25m revolving credit facility was also agreed with Nationwide, taking Stonewater’s total facilities with the bank to £91m.
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The consolidation plans aim to address the legacy businesses from a 2015 merger between Jephson and Raglan housing associations. Stonewater said the new structure was recognised by the Regulator of Social Housing (RSH) in its recent in-depth assessment, for which the association received a G1/V1 grade.
Anne Costain, director of corporate finance at Stonewater, said: “All five registered provider divisions had assets and loans with a combination of lenders and this was good for flexibility at that time.
“However, we always knew that this would not remain the best structure due to its complexity. Also, some of the bank covenants and the conditions set by the individual banks we could borrow the money under were starting to restrict our potential.
“It was the right time to address this by restructuring and this now allows us to present a clearer picture to investors and access funding more efficiently.”
A spokesperson from SMBC, said: “SMBC is pleased to have worked on this environmental-linked loan with Stonewater to support its ambitions of delivering more energy efficient homes.”
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