Welsh housing associations meet with investors

The meeting at the end of February, brokered by Community Housing Cymru (CHC), was attended by a number of Welsh landlords as well as representatives from the Welsh government. The delegation met bond funders, credit ratings agencies and bank lenders.

The Welsh housing association sector has set a target of delivering 20,000 new affordable homes by the end of the current Welsh Assembly period in 2021.

CHC was in talks with the European Investment Bank (EIB), the EU’s non-profit bank, to establish a £200m funding vehicle, but the plans slowed to a stop last September amid Brexit uncertainty.

CHC chief executive Stuart Ropke told Social Housing that the recent meeting was not intended to pave the way for a new group deal, but to show investors that the regulatory and policy environment was different in Wales from in England.

Last year, Pennaf issued the first own-name bond by a Welsh housing association when it raised £250m with a coupon of 3.212 per cent.

However, other landlords could follow suit after the EIB deal, which would have offered lower interest rates, fell away.

“The EIB [deal] wasn’t happening, for obvious reasons,” said Mr Ropke. “There were discussions about putting another group deal together, but people have gone out to source the financing they need themselves.”

Mr Ropke added that pricing “was never going to be as good” as it would have been under the terms likely to be offered by the EIB. However, the London meeting was intended to make Welsh borrowers more attractive to lenders.

“There had been a lack of understanding about the Welsh sector from investors,” he continued.

“We spent a lot of time talking to investors about why Wales was different. We talked about the ambition for the sector for the next 20 years.”