Highlights from the first Centrus Housing Conference
In early July, Centrus gathered over 100+ housing sector clients and professionals for a half-day conference in Central London to discuss the theme: “Housing sector: a new financial landscape?”
The day started with a panel of presenters focussed on the current and future financial landscape, specific to the housing sector and venturing beyond. Delegates were addressed by Anne Costain, Director of Finance, IT and Procurement at Radian Housing, followed by Lisa Pinney, Executive Director of Resources at POBL.
Paul Stevens, Managing Director, Centrus and session Chair commented, Radian and Pobl are leading providers of affordable housing in England & Wales respectively. Both have achieved significant organic growth but they also have in common group structures and legacy funding challenges arising from combination with other housing associations. Anne and Lisa shared their experiences, where both organisations are on a journey towards improving their treasury portfolios, supported with corporate finance advice provided by Centrus.
The next session of our event debated the role of Equity and Profit and what the risks and opportunities are arising from commercial activities. The Centrus team was joined by Will Perry, Assistant Director at the Regulator of Social Housing, alongside Christophe Parisot, EMEA Head of Public Finance at Fitch Ratings.
Barry Greyling, Director Centrus and session Chair commented, The session highlighted the contrast in views from the different stakeholders with Jon adding insight into the various guises of equity and how these could offer a range of interesting options to the sector. Will pointed out that there has not been any substantive successes from the for-profit providers yet and Christophe setting out the challenges from a rating perspective. Christophe also gave some insightful commentary around how the sector should be able to weather the credit impact of a potential (or eventual) Brexit.
Our third panel brought the risk management subject into focus and the Centrus view on the financial markets, data management and reporting solutions. We heard Conor O’Flynn, Managing Director of Centrus Analytics, discuss the ideal 80/20 ratio of time spent in transactional versus strategic activities and how housing associations should look to start their unique journey to achieving an 80/20 balance between managing drivers and managing transactions.
Our final debate raised the question: what could funding solutions look like in the future, in the context of current and emerging trends?
Maria Goroh, Centrus' Investor Coverage Director commented, These are exciting times, with a positive investor landscape for housing associations to enter the institutional funding market. We are seeing an increased number of investors entering the sector from a variety of funding structures. This creates a wider range of funding options for borrowers to choose from.
Dominic Brindley from NatWest discussed the sector evolution and the emerging challenges around ESG bonds and, the prospect of the transition between LIBOR-SONIA and Michael Carr, Director at National Australia Bank, and Amelia Henning, Director at Barings brought insight into how the sectors evolution and changing risk profile is viewed by new and expanding lenders.
John Tattersall, Director at Centrus and session chair, commented The last panel session highlighted the strong demand for housing debt from investors but also sounded a cautious note around lender perceptions of increased commercialisation. Other highlights included a discussion on the potential appetite of some investors for SONIA linked debt and how regulatory headwinds in the pension sector may provide ESG compliant bond pricing benefits for the housing sector. For providers looking to access debt the current environment is highly attractive, but the panel outlined the growing complexity and diversity of options facing borrowers with a recommendation that approaches to the market should be appropriately considered and structured.
The Centrus Housing team is very pleased with the success of our first conference and hope it provided valuable insight to all attending.
To find out more about Centrus corporate finance advisory, please contact Paul Stevens and for interest in our treasury systems solutions please talk to Conor O’Flynn.