Finance package to help deliver 2000 homes by 2028
Shepherds Bush Housing Group has secured a new finance package of £190m, including its first combined bank and institutional debt transaction, to support delivery of its new 2018-2023 Corporate Strategy.
The strategy includes building 2,000 new homes over the next 10 years and investment in existing homes while developing the digital capacity of the 5,000-home west London association.
SBHG secured £40m from AIB and £150m from Macquarie Infrastructure Debt Investment Solutions (MIDIS) and MUFG Bank (MUFG). The MIDIS and MUFG package is a new long-term debt facility of £150 million in the form of a three-year revolving credit facility of £30 million, a 40-year institutional debt facility of £50 million with a deferred draw and a shelf facility of £100m. The loans add to the landlord’s £157m financing portfolio.
SBHG CEO Matt Campion said: “We have been providing affordable homes and services in west London for 50 years. Our Corporate Strategy sets the framework for our future. Through our strong local partnerships, we have ambitious targets for building the affordable homes our area needs. This is in addition to investing in our existing homes and improving additional services which support our west London community.”
SBHG Finance and Development Director Mohit Jain said: “We are aiming to significantly expand our development pipeline over the next few years and are very pleased with the financing achieved with MIDIS, which has taken a long-term outlook on our business, and shown flexibility and willingness to listen to our funding needs. We look forward to building a long-term partnership. We received interest from a wide range of lenders to the sector and selected these lenders because their terms offered value for money for SBHG and matched our Corporate Strategy objectives."
Sanjay Narbheram, Director of Housing Finance at MUFG, said: “We are delighted to have supported SBHG, particularly as it represents their first combined bank and institutional debt transaction. The strength of SBHG’s credit allowed us to run a competitive institutional funding process, which resulted in sourcing and successfully working with MIDIS.”
Gareth Edwards, an Associate Director in MIDIS, said: “We are delighted to be able to support the provision of greatly needed affordable housing through SBHA, and we look forward to working in partnership with them over the term of the facility. Increasingly local housing associations are looking for alternative strategies to help meet longer-term funding requirements to support further investment, which is where institutional investors come in. The social housing sector is highly attractive to many investors because it offers long-term, secure, regulated and stable cashflows, and delivers a strong social impact.”
Our advisers were JCRA and Devonshires.
SBHG’s Corporate Strategy (download here) aims are:
» Increase resident satisfaction to 90%
» Increase resident contact on-line to 80%
» Increase accurate customer data held to 90%
» Support 200 people into employment and training
» Develop 2,000 social homes (by 2028)
Financial strength and value
» Increase operating margin to 34%
People and culture
» Secure Investors In People Platinum