CHP raises £100m bank finance from existing lenders and new sector entrant

News18 Apr 2019Sarah Williams

Chelmer Housing Partnership (CHP) has raised £100m in bank finance, with a new loan from recent sector entrant National Australia Bank (NAB) joining increased facilities from existing lenders.

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The new facilities followed a competitive procurement exercise, which included approaches to CHP’s existing lenders Barclays and Lloyds, which agreed to extend facilities.

CHP has said that it will use the facilities to support its development programme of building “a home a day”, and to increase liquidity “in these uncertain times”.

Treasury advisor Centrus ran the procurement exercise and worked with the CHP board to select and negotiate the best terms from the three lenders.

The presence of NAB in the refinancing package joins a handful of deals involving the Australian lender announced this week.

CHP is based in Chelmsford, and owns and manages 10,000 homes throughout Essex.

The new £100m facility comes two-and-a-half years after CHP’s sale – at an all-in cost of 3.377 per cent – of £75m of retained bonds from its 2013 issue, through its Myriad Capital subsidiary.

Paul Edwards, deputy chief executive and chief financial officer at CHP, said: “CHP had two main aims in this process: maximising capacity for growth and increasing liquidity in these uncertain times. I’m delighted to say that we have achieved both – building on our strong relationships with existing lenders Lloyds and Barclays and starting a new relationship with National Australia Bank, too.

“We’ve set up the right treasury structure to deliver our ambitious new corporate plan, which focuses on building a home per day, and at the same time increased our secured revolving credit facilities to act as further risk mitigations.”

Michael Carr, director at NAB, said: “National Australia Bank was very pleased to close this transaction with CHP as part of our new UK social housing strategy. The transaction enables us to commence a relationship with CHP and will help it continue its invaluable work in providing much-needed homes in the Essex region.

“The NAB UK social housing team is committed to building relationships with housing associations to help reduce the housing shortage. Providing finance to this sector isn’t just about assets and financial transactions – it’s about projects that make a difference to people’s lives.”

Andy Taylor, director in the social housing department at Barclays’ Public Sector, said: “Barclays has a strong and long-standing relationship with CHP and for us to provide them with further funding to support their development programme of 350 new homes a year was an obvious fit with our ongoing commitment to the social housing sector.”

“The NAB UK social housing team is committed to building relationships with housing associations to help reduce the housing shortage” – Michael Carr, NAB

Claire Simpson, relationship director for social housing at Lloyds Bank, said: “CHP is a modern, progressive housing association which is playing a key role in helping to tackle the housing shortage in the area where it operates. This latest fundraising supports its strategy of raising finance to provide services and build more high-quality affordable homes.”

Paul Stevens, managing director at Centrus, said: “CHP has achieved a truly excellent result, enhancing existing strong banking relationships including unlocking additional development capacity at negligible cost, while at the same time establishing a new relationship with NAB which fits well with the overall treasury mix and enables strategically important diversification of funding.”