Edinburgh housing association strikes £45m deal
Published by Max Salsbury for 24dash.com in Housing and also in Finance
An Edinburgh-based housing association has struck a deal that will provide it with £45 million in long-term financing.
Link Group's deal with M&G Investments is the first bilateral investment in a Scottish housing association by a institutional investor.
The 31-year fixed rate package will enable Link to refinance some of its existing bank debt and meet its development ambitions over the coming years.
The Link group of social enterprises reaches around 10,000 people in 26 of Scotland’s 32 local authority areas.
Before the deal, Scottish housing associations relied exclusively on banks and The Housing Finance Corporation to meet their funding requirements.
In recent years, as the general long-term financing landscape has changed, non-bank lenders such as M&G are providing an increasing amount of finance over the long-term.
Craig Sanderson, Link's chief executive, said: “Link continues to deliver over 200 new homes each year, despite the challenging economic climate. This new funding not only allows us to supplement this substantial programme but also demonstrates a key institutional investor’s support which will enable Link to accommodate many more families in housing need.”
Mark Davie, M&G's head of social housing, said: “This is another high quality private placement that delivers low-risk cash flows to our clients over the long-term. M&G has invested in excess of £4bn in UK social housing through property transactions, public bonds and private placements. Much of that investment has come since the start of the financial crisis and we’re keen to do more.”