Case Studies
Delivering successful outcomes for our clients

Grŵp Cynefin on new £40m Private Placement and conversion to sustainability-linked facilities

Grŵp Cynefin completed an ambitious refinancing project to reduce risk, fund investment, and strengthen its financial profile.

The not-for-profit housing association, which manages more than 4,000 homes across North Wales and north Powys, provides highly positive impact to the lives of its tenants. The completion of this refinancing underpins delivery of 500 new homes over the next five years, whilst enhancing Grŵp Cynefin’s ability to champion sustainable communities and the Welsh language and culture.

A £40m, 33-year, part deferred, private placement was arranged allowing the refinance of c. £35m of legacy bank debt, whilst liquidity has been bolstered by a new £10m RCF.

The resulting transaction materially simplifies and extends Grŵp Cynefin’s treasury portfolio; the number of active lenders has fallen to 6 whilst the Weighted Average Life of the portfolio has increased by 10 years to 25 years. Financial covenants and controls have been revised, providing increased flexibility and resilience in the future.

Reflecting Grŵp Cynefin’s focus on sustainability, both its homes and the communities which it serves, the retained and increased bank funding  has been restructured into sustainability-linked facilities. Once defined Environmental and Social KPIs are met, Grŵp Cynefin’s borrowing costs will be reduced, further enhancing its capacity to invest into new and existing homes.

The private placement comprises three notes, of which two are deferred between 12 and 24 months and aligned to fund development and investment into existing assets. The all-in coupon reflects the attractive market conditions and taken together with the banking refinance results in a very positive NPV saving for Grŵp Cynefin, whilst materially reducing refinance and interest rate risk.

 

Bryn Ellis, Group Director of Resources - Grŵp Cynefin The business case for this refinance was predicated on risk reduction, streamlining operational management, and reducing and locking our running interest costs into the medium term.

Across the board we have outperformed against our initial expectations. We are delighted to have strengthened our working relationship with two key funders and to have brought on board a new long-term funding partner which has recognised our financial strength and commitment to long-term sustainability.

Centrus and Devonshires are both long standing advisors to Grŵp Cynefin and both have really delivered for us; we are grateful to them both in working hard to ensure the success of this transaction.
John Tattersall, Senior Director - Centrus This transaction, which follows an initial partial refinance in 2019 finalises the modernisation of Grŵp Cynefin’s treasury structure. This proactive treasury strategy is reflected in the excellent outcomes achieved, which will enable Grŵp Cynefin to invest into social impact with confidence going forward.

Centrus acted as sole arranger on the private placement, worked with management to develop the initial strategy, and provided full business planning and transaction advice and support. Devonshires acted as borrower counsel, Addleshaw Goddard acted as lender counsel, and Savills’ provided valuation services.

Press release date: 16th August 2021