Centrus have supported One Housing Group in the sourcing of a significant new funding line
Centrus have supported One Housing Group in the sourcing of a significant new funding line, in the form of a private placement for £85m.
OHG is an active developer and a key feature of the deal was the desire to make more efficient use of the shared ownership portfolio. As well as using that existing security this transaction supports the financial robustness of a development programme featuring shared-ownership. A competitive process was run with a number of investors expressing interest; several structures were explored but ultimately the transaction was structured as a loan directly to the RP.
Pricing was based at an attractive margin over the 2036 reference gilt which was on the day yielding 1.985%. The transaction is unique in that it is primarily secured against a portfolio of shared ownership property whilst retaining financial covenants based on sector norms. OHG was also able to take advantage of the currently low interest rate environment and the margin is only slightly above where it would have been for a ‘vanilla’ security basis thanks to the detailed work on the construction of the asset cover covenant.
Centrus supported OHG on the funding strategy, the approaching and selection of a preferred institutional funder, and the subsequent negotiation and management of the transaction close.