£50m debut capital market transaction for Welsh social housing provider
Grŵp Cynefin, a social housing provider operating across North Wales and north Powys, which manages 3,900 properties, is pleased to announce its debut private placement with BAPFIM (BAE Systems Pension Funds Investment Management Limited).
Leading corporate finance advisor to housing associations in the England, Wales and Ireland, Centrus, supported Grŵp Cynefin on the 30-year secured private placement of £50m, which will be drawn over three different tranches, the final of which is deferred to July 2021.
The highly competitive interest rate offers Grŵp Cynefin an attractive source of long dated funding tactically aimed at reducing the market risk during a period of expected volatility and underpinning its business plan. Grŵp Cynefin is using the initial proceeds to refinance four existing facilities in a strategic step to rationalise its loan portfolio, reduce its funding costs and increase the weighted average life of its debt portfolio.
Bryn Ellis, Business Services Director at Grŵp Cynefin, said:
The completion of this long-term private placement is an excellent outcome for Grŵp Cynefin. Our long-term treasury strategy is always prepared for some volatility but this new funding improves our ability to manage liquidity and interest risks going forward. Grŵp Cynefin is now in a strong position to deliver on our Corporate Plan objectives and address treasury risks for the future.
The proposal from BAPFIM was very attractive to Grŵp Cynefin as we always aim for a high level of current and forward looking liquidity. It also delivered on our treasury objectives to reduce funding costs for the future whilst improving our hedging position and thereby reducing the exposure to future interest rate volatility.
Shan Lloyd Williams, Grŵp Cynefin Chief Executive added:
Grŵp Cynefin appreciates the assistance from the Centrus team which contributed to the excellent overall outcome.
This further strengthens the liquidity of Grŵp Cynefin and will help us deliver 400 new homes by 2021. We were delighted to work with Centrus to achieve this great result and are looking forward to building a long-term relationship with BAPFIM as a Grŵp Cynefin funding partner.
Centrus advised on the placement and execution of the transaction as well as the refinancing of the existing facilities. Director at Centrus, Barry Greyling, who led the Centrus team said:
The attractive terms achieved in a period characterised by market uncertainty and volatility, are testament to an organisation which is well led and with a clear strategy as a leading provider of social housing. Centrus is pleased to have supported Grŵp Cynefin in this highly successful debut capital markets transaction.
David Cryer, Head of Liability Driven Investments (LDI) and Private Placements at BAPFIM said:
We are delighted to be providing Grŵp Cynefin with a long-term funding solution, which reflects our continued commitment to the sector and demonstrates our flexibility in meeting Grŵp Cynefin’s drawdown requirements.