New build plan

Caledonia raises £75m in first private placement

Leigh Grubb: significant milestone

Caledonia Housing Association, which is one of Scotland’s biggest providers of affordable homes, has secured a £75 million private placement to construct more than 500 energy efficient homes.

The transaction marks not only Caledonia’s debut private placement but also its first source of sustainable funding.  

Caledonia was supported by NatWest to raise the profile of the association in the market and generate interest from investors.

“This proved very productive with strong interest shown by investors, resulting in bids which were nearly five times the launch amount,” said the association.

Despite the challenging market conditions, the strength and stability of Caledonia meant that investors offered 20-35 year maturities and a distinct framework of funding deferrals up to 44 months. 

This will allow Caledonia to draw down the funds in three tranches to meet its business plan funding requirements and provide greater certainty for the future development and investment programmes. 

Leigh Grubb, director of finance and governance at Caledonia Housing Association, said: “Providing affordable and energy-efficient housing is central to our strategy, and the completion of this funding package is a significant milestone for Caledonia Housing Association.  

“It provides an opportunity for investors to support our ongoing housing development programme as we continue to play a part in meeting the overwhelming need for high quality social housing in Scotland.  

“This funding exercise also underlines the commitments the association has already made to its broader sustainability agenda and we are pleased to have the support of our new investors as we set out to deliver on our key goals.” 

George Flynn, Financing Solutions, NatWest said: “NatWest is proud to have enabled and supported Caledonia Housing Association in achieving its debut private placement.

“This has enabled Caledonia to develop strong and supportive investor relationships and a funding package that is closely aligned to their business plan requirements, achieving their core financing objectives.”

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