Case Studies
Delivering successful outcomes for our clients

Livin Housing achieves lower funding costs following complete debt refinance

 

Advised by Centrus, Livin Housing has today finalised a complete debt refinance. The £64.5m legacy LSVT syndicated facility was split into three new bi-lateral facilities totalling £120m.

Livin was established in 2009 by a stock transfer from Sedgefield Borough Council (now part of Durham County Council) and provides over 8,400 homes within County Durham.

The transaction sees a £64.5m fixed-rate syndicated loan refinanced via a £65m long-term institutional private placement provided by Pension Insurance Corporation (PIC). This note comprises three maturities with a blended weighted average life of 38 years and a very attractive coupon. Break costs associated with the refinance have been funded by a 10-year loan from AIB, with Lloyds providing a new £30m five-year RCF to meet liquidity and development costs.

Despite the high levels of break costs incurred to exit the legacy LSVT loans, the refinance will materially reduce Livin’s interest cost, yielding an NPV saving of over £14m in just the first 10 years whilst increasing the longevity of its financing portfolio. Covenants and controls have also been streamlined to ensure Livin is able to access greater capacity, whilst also optimising its long-term financial resilience. The success of this transaction shows that housing associations limited by LSVT covenants can restructure and secure attractive long-term flexible finance from the institutional market.

This was a complex refinancing with numerous stakeholders involved and its successful completion puts Livin in a strong and well capitalised position from which to continue its successful social business.

Centrus acted as sole financial advisor to Livin and placed the private placement.

Sean Brodie, Executive Director of Finance and Development at Livin, commented that: We are delighted to have achieved such a positive outcome. The Board have established a clear vision for the future of our business and the new funding arrangements provide an excellent platform from which we can invest further in providing great homes and sustaining strong communities.

We are grateful to Centrus, for their invaluable support throughout the process, and to Lloyds, AIB and PIC, for their continued commitment to the sector and for helping us to achieve our social aims.
John Tattersall, Director at Centrus, commented that: Livin’s strong financial profile and clear business model attracted keen interest from banks and institutional investors. Competitive pricing on the new facilities have delivered substantial savings net of break costs. In addition, Livin has significantly increased its financial flexibility and delivery capacity to the ultimate benefit of its residents.
Marno Jooste, Director at Pension Insurance Corporation, commented that: We are very pleased to have worked with Livin and Centrus on this transaction. We have been able to agree on a funding agreement which meets the needs of both parties, allowing the development of social housing while backing the payment of our policyholders’ pensions on a secured basis.

Visit the Residential & Real Estate page to find out the wide range of services that Centrus provides to Housing Associations and Registered Providers in the UK and Ireland.