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Danish bank makes Wales debut with £45m funding deal

News23 Oct 2023Michael Lloyd

Danske Bank has agreed a £45m funding packing for Welsh landlord Newydd, its first deal for a housing association in the country.

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Newydd Housing Association has secured a £45m funding package with Danske Bank to invest in new and existing homes in the Danish Bank’s first deal in Wales #UKhousing #SocialHousingFinance

The deal comprises a 15-year bank loan and a seven-year revolving credit facility (RCF). The £45m is interchangeable between the two facilities. The interest rate was not disclosed. 

 

The funding is expected to convert to a sustainability-linked loan once the process to agree environmental, social and governance (ESG) KPIs has been agreed, Danske said. 

 

Newydd manages around 3,000 homes in Mid and South Wales. 

 

Danske has previously leant to housing providers in Northern Ireland and England. In April, LHP secured a £30m ESG-linked, seven-year RCF from Danske Bank as part of a refinance to remove restrictive covenants.

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Newydd has so far drawn down £15m of funding to invest in projects that are under way, including the third phase of its development in Llandrindod Wells. This 79-home scheme is being built in partnership with Newydd and Powys County Council.

 

Newydd has a target to deliver 600 new homes over the next five years, growing the organisation by at least 20 per cent in terms of stock size. It is focused on investing in sustainable materials and making its homes energy efficient.

 

According to its results for the year ending 31 March 2023, Newydd completed 70 new homes in 2022-23, a drop from 96 in the previous year.

 

In the results, the Cardiff-based housing association said it is currently in contract and on site to deliver a further 300-plus new homes, has “a healthy pipeline” of projects awaiting funding and anticipates to complete 100-plus homes in 2023-24.

In 2022, Newydd expanded its optimised retrofit programme to 110 more homes. The housing association said it had installed 64 intelligent energy systems and commissioned solar panels for 34 homes.

 

Lee Bolderson, finance and resources director at Newydd, said: “Danske showed a great understanding of the social housing sector and took time to understand our history and vision for the future. We look forward to providing affordable and energy-efficient homes to our tenants and customers for many years to come thanks to their support.”

 

Dominic O’Neill, corporate manager at Danske Bank, said: “This transaction in Wales fits our strategic growth plan to be active in helping the sector thrive.”

 

Savills Financial Consultants advised Newydd on the deal.

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Asset managementClimate changeDecarbonisationDevelopmentEnergy efficiencyESG/impact investmentHousing Association/RPWales
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