Sentinel secures new £75m fund for affordable homes
Published by Lucy C Wilson for Sentinel Housing Association Ltd in Housing
Sentinel Investors tour new homes
Sentinel Housing Association has just successfully secured a £75million Bond in the capital markets to provide funding for new affordable housing.
The funding was raised through a Private Placement Bond, with Sentinel launching a funding proposal in the capital markets to attract institutional investors such as pension funds and insurance providers to invest in the organisation.
The process involves an agency, which for Sentinel was Barclays Capital Markets based in the City. A detailed document on the proposal and the circumstances of Sentinel was launched called a Private Placement Memorandum which was then followed by a Roadshow Presentation in the City to interested organisations and to the United States for the U.S. markets. Financial institutions then came back with proposals on how much funding they would be prepared to provide and on what terms.
In Sentinel’s case, the initial Bond launch was for £50million, and they received bids for the funding of £135million. Because of the quality of the offers Sentinel decided to scale up the Bond to the maximum of £75million and were particularly pleased that they attracted $25million (£15million) of funding from the U.S. capital markets.
Funding is a mixture of 20 and 32 year funding at a fixed interest rate. The Placement went extremely well in the capital markets with several comments received from investors on the high quality of the presentation and proposal from Sentinel.
Sentinel will use the investment to develop more affordable homes for people who are priced out of the property market, at a time when 1 in 12 families across England are on housing waiting lists for social housing.
The Chief Executive, Martin Nurse, said:
“The Grant Funding from Government for affordable housing has been cut by over 65% and the banking sector is no longer open for long term borrowing. We have therefore had to think of innovative ways to raise funding to continue Sentinel’s work to provide high quality, affordable homes in Basingstoke and across North Hampshire. The Private Placement Bond has been a lot of hard work by Sentinel, but we are really pleased to have been so successful to achieve the £75million. It means that the proposals we have the for affordable housing at Merton Rise in Basingstoke and the former Eli Lilly site are fully funded and we have the money for other such similar projects.
At this time of economic recession, we are playing our part in stimulating the local economy through construction and development of new housing to provide jobs for local people and contracts for local businesses. This funding is very welcome to get housing projects moving in the new year.”