Centrus advises Wales & West Housing on £75m multi-deferred tranche private placement, split between two bilateral investors
Wales & West Housing (“WWH”) has a clear vision to achieve strong, sustainable growth, making a difference to people’s lives, homes and communities. WWH manages more than 12,000 high quality, affordable homes, in 15 local authority areas across Wales, housing more than 22,000 residents. These include more than 3,000 dedicated properties for older people as well as innovative supported housing solutions for people with a range of particular needs.
WWH had identified a minimum £50m funding requirement to support growth plans, including the development of c.2,500 new homes by 2025. Although its liquidity position remained strong, WWH wished to explore opportunities to forward fund the business plan, conscious of the favourable interest rate environment. Previous institutional funding was largely sourced via THFC, including accessing bLEND. Approaching investors for Private Placement funding was therefore a new endeavor for WWH and one which required careful navigation in order to optimise terms. Centrus was appointed to advise and arrange.
Centrus worked closely with WWH throughout the procurement of this funding, from producing a ‘teaser’ to initially test market appetite, to compiling and supporting the Investor Presentation, selection of the preferred investors and closing out the transactions and documentation. This process enabled WWH to convey its very strong credit risk story, in order to negotiate and drive optimal terms, with no need to obtain an external credit rating. As well as highly competitive pricing and c.60% of the funding deferred for up to 18 months, covenants and controls were minimised to ensure full flexibility.
The strength of investor interest resulted in WWH deciding to raise £75m and splitting this across two investors, Aviva Investors and PIC. This split has enabled WWH to agree a range of maturities, up to 40 years, and importantly creates two new investor relationships with future growth potential.
Stuart Epps, Executive Director (Resources) – Wales & West Housing We are delighted to have secured this funding with PIC and Aviva Investors and look forward to a long and fruitful relationship with both of them. These loans offer excellent value over a great many years and provide us with the funding to meet our ambition of strong sustainable growth to make a difference to lives, homes and communities throughout Wales. We intend to build nearly 2,500 new homes over the next five years, the vast majority of which will be social rented homes for those in the greatest housing need. Many thanks to Paul, Maria, Conor and the team at Centrus for organising and running the process for us and for helping us to achieve such a great outcome