£40m funding facility
Bank backs innovative housing association deal
The transaction, which combines a linked revolving credit facility (RCF) and private placement, was arranged by Bank of Scotland and will be used to support the Hanover’s plans to build at least 40 housing units a year.
The group, which manages 5,000 properties on 200 developments across Scotland and has a focus on housing for older people, has arranged a five-year £20m RCF with Bank of Scotland. At the same time, it has also agreed a £20m private placement from an unnamed institutional investor. This finance, which will be drawn down in 2018 and mature in 2048, will be used to repay the RCF, which will itself be adjusted to £5m in 2018.
The structure of the facility is the first of its kind in the social housing sector as the RCF and private placement are formally linked and share the same security. Hanover said the mix provides it with a flexible finance package tailored to its ongoing needs.
Helen Murdoch (pictured), chief executive of Hanover Scotland, said: “The versatility of the structured borrowing fully meets our planning requirements.
“Hanover has an established history in providing high quality affordable housing for the elderly and this funding will enable us to continue to meet our ambitions to provide much needed new homes.”