Places for People becomes first HA to raise funds in euros

The group has raised the €40m, 10-year private placement via its £650m unsecured European Medium Term Note (EMTN) programme.

It comes as PfP continues on its plan to increase its level of unsecured debt across its portfolio from 45 per cent to 60 per cent.

Lloyds Bank placed the EMTN transaction.

Raj Jayaprakash, associate director in Lloyds Bank’s debt capital markets team, said: ‘The issue reflects Places for People’s continuing innovative approach to raising unsecured financing, with this transaction marking the first time a UK HA has raised capital markets funding in euros.

‘A key part of the deal, therefore, was in educating investors about UK social housing, given how much the sector varies across Europe.

‘The deal represents an endorsement of Places for People’s strategy as well as providing further diversification of the group’s funding streams.’

Places for People’s debt - which was at £2bn at 31 March 2013 - includes UK wholesale and retail bonds, along with private placements from the US and Japan.

It completed an innovative private placement which involved a yen currency swap structure in 2010.

When the EMTN programme launched in 2007 it was around 15 to 20 bps above market prices, but finance director Simran Soin told Social Housing in November 2013 that there is ‘practically no difference at all’ compared with where historic secured bonds are trading in the secondary market today.

Under the programme, PfP can issue notes denominated in any currency agreed with the lender.

PfP also raised £252m in March 2014 by selling a 50-year lease on 4,000 affordable properties to Legal and General. The leaseback ‘income strip’ deal sees L&G purchase the lease on the properties, which are in turn let back to PfP Homes. The properties will then be transferred to a separate RP at the end of the lease.

The group’s £380m 2012/13 turnover included 61 per cent social rented activity, 19 per cent market sale and 7 per cent private rent in 2012/13.

Of the group’s debt at 31 March 2013, 79.6 per cent was fixed and hedged, with swaps on £30m of floating debt.

It owned or managed 81,556 homes in March 2013, including 23,949 for market rent, and acquired Residential Management Group for £14m after the year-end, which manages over 60,000 leasehold properties.

PfP also acquired contractor DS Leisure in 2012/13, which manages about 100 leisure facilities on behalf of 28 local authorities.