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Latest deal completes in a string of private placements for Scottish HAs

Eildon Housing Association has become the latest social landlord north of the border to complete a private placement, in a deferred deal that also marks the first in Scotland for investor the Pension Insurance Corporation (PIC).

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Latest deal completes in a string of private placements for Scottish housing associations, as @EildonHousing secures £40m #ukhousing #socialhousingfinance

The registered social landlord, which is based in the Scottish Borders, has secured £40m in the deal, including £15m deferred until 2020.

 

Santander Corporate & Investment Banking arranged the transaction, which followed a competitive process.

 

The funding matures in 2053 and 2055, to match PIC’s pension liabilities in years where it will be difficult to source cash flows in the public bond markets and to meet Eildon’s borrowing needs.

 

The debt is secured on a pool of housing assets.

 

It will be used to support Eildon’s development plan, under which they are building 750 new homes by 2021.

 

The deal marks the latest in a string of private placements completed in Scotland this year.

 

Last week, Edinburgh-headquartered Link Group announced that it had secured £50m debt on a private issue with Canada Life, using a ‘wrap’ from monoline insurer Assured Guaranty to secure “materially” better pricing.

 

In February, Glasgow-based Queens Cross Housing Association completed a £40m private placement with M&G Investments.


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Other Scottish placements

 

Only a handful of other private placements have completed in Scotland in the past. In July 2018, Kingdom Housing Association secured £85m from a consortium of unnamed institutional investors, with an immediate drawdown of £35m and a further £50m 12 months after the initial drawdown.

 

Albyn Housing Society took £30m investment from BAE Systems in a private placement in February 2017, and in May of the same year Glasgow-based Wheatley Group completed a £100m private placement led by BlackRock Real Assets.

Commenting on today’s deal, Liz Cain, senior debt origination manager at PIC, said: “This is our first private placement investment with a Scottish housing association and we are very pleased to have worked with the team at Eildon to complete it. We were impressed with their strategic focus, standards of governance and long-term approach.”

 

Nile Istephan, chief executive of Eildon, said: “This is a very important partnership for Eildon and we are delighted to have secured PIC’s investment. These funds are crucial as we seek to build 750 new homes.”

 

Tony Fordham, head of private placements at Santander, added: “Investors were attracted to Eildon’s very sound financial performance and strong management team.”

 

Eildon’s legal advisor was Harper Macleod, with additional advice from QMPF. PIC was advised by Devonshires/Brodies and valuation support was undertaken by JLL.

 

Hear panellists discuss the outlook for the sector at the Social Housing Scottish Annual Conference on Thursday 5 September 2019 in Glasgow

Social Housing special reports

Social Housing special reports

Each month Social Housing focuses on a specific aspect of housing finance and collates and scrutinises the data for hundreds of housing organisations.

 

The reports below contain unparalleled commentary and analysis along with detailed sortable and searchable data tables.

 

 

Unit costs 2019 Our analysis of data from the English regulator has found that unit costs have risen among all types of housing association, with overall maintenance costs seeing the highest weighted average increase of nearly seven per cent

 

Impairment 2019 Housing associations’ impairments rise almost 40% in a year, driven by fire safety costs, contractor insolvencies and reduced land values

 

Global accounts 2018/19 Housing associations’ surplus for the year before tax decreased by five per cent to £3.76bn, driven by a 6.6 per cent drop in England

 

Affordable rent profile 2018/19 The level of affordable lettings dropped for the third year in a row

 

Staff pay Data from audited accounts of 206 housing associations shows that average staff pay in 2018/19 was £31,787 – a rise of 3.2 per cent over a 12-month period

 

Professionals’ league Our exclusive professionals’ league finds that activity continued apace in 2019, when housing associations increasingly looked to private placements

 

Sales proceeds Despite a 10 per cent rise in housing associations’ income from development sales in the last financial year, sales revenue is likely to remain flat over the coming years as a result of the property market downturn

 

Capital commitments The total capital commitments of 200 housing associations rose by 15 per cent in the past year, analysis by Social Housing has found

 

Reliance on sales surplus Social Housing finds that the total sales surplus of 150 English registered providers has dropped by nearly 10 per cent, as a result of lower market sales surplus

 

Stock dispersal How many council areas does your housing association operate in? How concentrated is its stock?

 

Accounts digest 2018/19 How does your housing association’s finances compare to others?

 

Housing Revenue Account part two How do councils compare in their 2018/19 Housing Revenue Account positions? Steve Partridge of Savills takes an in-depth look

 

Diversification of income We look at how housing associations are diversifying their income, and finds that they made 10.3 per cent more revenue from shared ownership and non-social housing activity

 

Impairment 2017/18 Social Housing takes a close look at the accounts of the 130 largest housing associations, and finds that impairments rose by nearly a third to £78.4m in 2018

 

Global accounts Social Housing’s analysis of the sector’s global accounts finds that housing associations’ pre-tax surplus fell last year – driven by drops in England, Scotland and Wales (August 2019)

 

Affordable rent profile We find that the number of affordable rent lettings recorded last year by housing associations in England has dropped for the second year in a row, suggesting that the sector is shifting away from the tenure

 

Capital commitments We scrutinise the capital commitments of the 208 largest housing associations in the UK (June 2019)

 

Housing Revenue Account part one Steve Partridge of Savills takes a look at the financial factors councils should consider in their Housing Revenue Account business planning (May 2019)

 

Reliance on sales surplus Our analysis reveals that profits form 42 per cent of 150 English housing associations’ total surplus (April 2019)

 

Sales proceeds We look at housing associations’ build-for-sale income and find a two per cent increase in 2017/18 (March 2019)

 

Shared ownership sales England, excluding London, has seen a four per cent rise in shared ownership sales – much lower than last year’s 16 per cent increase (February 2019)

 

Stock dispersal We show that housing associations’ general needs stock is becoming more concentrated within their local authority areas (January 2019)

 

Click here to find more special reports

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