Monmouthshire Housing Association (MHA) has struck an £85m deal to refinance its entire loan portfolio in a move that will allow it to expand its housing stock and drive its social impact and green credentials.
The financing includes £65m from the Pension Protection Fund (PPF) in its first direct investment into the UK social housing sector.
The PPF’s funding is for 40 years and sits alongside £20m of flexible finance provided by existing lender Barclays.
The funding, delivered with advice from Savills Financial Consultants, has attracted one of the lowest all-in interest rates through a private placement for a UK housing association in the past 12 months.
As well as increasing affordable housing provision, the 4,000-home housing association is committed to a range of environmental, social and governance (ESG) targets – including cutting carbon by a further 10% by 2024 and helping 30 tenants into work each year.##
John Keegan, chief executive of MHA, said: “We are delighted to have concluded this important deal with our funding partners to support our delivery for tenants. It is especially pleasing to be working with the Pension Protection Fund on its first direct placement in the UK social housing sector.
“The PPF’s investment ethos aligns closely with our commitment to ESG principles, and the new facilities will enable us to deliver on our exciting vision of transforming lives through enabling the communities we serve to realise their personal ambitions.
“The fact that the PPF has invested £65m with a 40-year maturity demonstrates the confidence it has in MHA and in our future strategic direction.”
Mr Keegan added: “The new funding has simplified our legacy treasury portfolio and we are grateful to Barclays for its continued support as our longstanding partner. The new structure provides increased capacity and liquidity, along with improved covenants, giving us a strong platform to deliver our corporate plan and bold growth ambitions.”
Barry Kenneth, the PPF’s chief investment officer, said: “Our long-term investment in MHA is a unique deal for us and secures long-term sustainable returns which enables us to deliver on our financial commitments to our members.
“It also showcases our in-house expertise and capabilities in portfolio management and origination, which provides a greater degree of control over our portfolio and enhances post-fee returns.
“We see strong alignment between this investment and our responsible investment strategy in creating positive social and environmental outcomes.
“We’re pleased that our investment will support MHA’s continued focus on providing affordable housing to meet the growing needs of its local community, alongside the wider environmental and social benefits of this programme.”
Richard Whittaker, relationship director at Barclays, said: “We are very pleased to be able to continue supporting our longstanding client Monmouthshire Housing through the provision of a new revolving credit facility.”
