Karbon Homes completes £235m refinance and secures £54m loan
Karbon Homes has completed a £235m refinance and agreed a new 10-year £54m loan to unlock “significant financial capacity”.
Aerial view of houses in Yorkshire, where Karbon Homes operates (picture: Alamy)
Sharelines
The landlord, which manages around 33,000 homes across the North East and Yorkshire, renegotiated funding with four existing lenders. These are NatWest, Lloyds Bank, Santander UK and an unnamed private placement investor.
Karbon said there is “a range of improved terms”, such as achieving EBITDA-only interest cover covenants.
The housing association said it has “optimised both its interest cover and gearing definitions, achieving a result that gives the business a great deal of future flexibility and resilience”.
Read more
Karbon said lenders were also supportive of “enhancing asset cover levels and adding greater flexibility” to the landlord’s on-lending and merger terms.
The landlord said the new 10-year £54m loan was agreed with NatWest at “competitive all-in rates”. Across the refinance and new loan, Karbon has generated what it called “significant” interest savings of over £3m. The interest rates were undisclosed.
The provider said the new funding will be used to deliver its “strategic objectives”.
The housing association said the finance will ensure it is on track to deliver its commitments in its 2024-29 ‘Stronger Foundations’ strategic plan, which includes being “financially strong” to invest in new and existing homes as well as in work across communities.
In its 2023-24 financial results, Karbon reported extra repair costs of £7.2m and “an additional 5,500 repairs being carried out compared to budget”. During the year, the association completed 644 homes, a rise from 529 in the previous year.
Scott Martin, executive director of resources at Karbon Homes, said: “We’re very pleased with the result of this recent financing review, which will ensure our investment in our existing homes, our commitment to building new affordable homes and our continued delivery of valuable work across communities, is supported by our funding structures.
“The excellent outcome reflects the great partnership working throughout, with all parties taking the time to fully understand Karbon as a business and our key objectives and working quickly and effectively together to deliver a collectively beneficial outcome.”
Savills Financial Consultants served as Karbon’s treasury advisor for the refinance.
George Flynn, director at Savills Financial Consultants, said: “Working with the Karbon team on this exciting, innovative and important process has been brilliant.
“We are really proud to have supported Karbon through these critical negotiations in order to optimise and simplify its financing structure and to unlock significant financial capacity. We look forward to continuing to support Karbon in the future as they continue to deliver their ambitious strategy.”
Trowers & Hamlins served as Karbon’s lawyers on the deal, while Addleshaw Goddard worked for the lenders.
According to its 2023-24 financial results, Karbon saw its post-tax surplus fall from £83.5m in 2022-23 to £32.4m in the last financial year.
RELATED
News10 Mar 2025
Community Housing hires interim chief financial officer
News05 Mar 2025
Two Essex landlords in talks to merge by end of year
- © Social Housing
- All rights reserved