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Centrus advises Welsh Housing Partnership on a bespoke £93m private placement

Centrus has advised the Welsh Housing Partnership on a bespoke £93m private placement, funded by Pension Insurance Corporation.

Welsh Housing Partnership was set up as a strategic initiative in 2011 to deliver new affordable housing. It is owned by four leading Welsh housing associations, Hendre, Pobl, Coastal Housing and Grwp Cynefin and is supported by grant provided by the Welsh Government. The Partnership now owns nearly 1,000 homes acquired over five phases of investment.

Centrus has worked on this transaction for some time managing a number of technical challenges, alongside the RSLs and Devonshires as lead legal adviser. Attractive pricing has been achieved through careful structuring of the transaction to balance the risk for both parties. £10 million of the loan has been deferred for four years and the financing matures in 2033.

The transaction has been welcomed by the Welsh Government and Ian Williams, Chair of Welsh Housing Partnership, said:

The Welsh Housing Partnership is an innovative solution to providing much needed housing across Wales. We are delighted to work with PIC on this funding package and appreciate their willingness to provide long-term funding for something which is not traditional social housing.

From Centrus’s perspective, the transaction represents an innovative approach to the packaging up of risks to meet both parties’ requirements. Centrus worked closely with the sponsor RSLs to develop the structure in the first instance, facilitated the selection of a preferred funder through a competitive process and then negotiated terms with PIC. The structure presented a number of technical challenges requiring an imaginative approach through the negotiations and in drafting appropriate lender protections, and draws upon the underlying credit strength of the housing associations without disturbing their existing financing arrangements and balance sheets.