Pension Insurance Corporation (PIC) has invested £40m in debt issued by Eildon Housing Association to back the building of 750 new homes by 2021.
This is the first private placement PIC has done with a Scottish housing association with the transaction was arranged by Santander Corporate & Investment Banking.
Key points of the transaction are:
- £40m size spot funding, maturing in 2053 and 2055 to match PIC’s liabilities
- Drawdown of £15m of the loan is deferred until 2020, providing certainty of debt cost for Eildon
- The debt is secured on a pool of housing assets
- Maturity profile tailored to match PIC’s pension liabilities in years where it is difficult to source cashflows in the public bond markets, as well as meet Eildon’s borrowing needs
“This is a very important partnership for Eildon and we are delighted to have secured PIC’s investment.
“These funds are crucial as we seek to build 750 new homes,” said Eildon CEO Nile Istephan.
To date, PIC has invested over £1.5bn in the UK’s social housing sector, maintaining a specialist in-house team with a strong track-record of working with housing associations on bespoke funding transactions.
Liz Cain, PIC Senior Debt Origination Manager, said the Eildon deal was corporation’s first private placement investment with a Scottish housing association.
“We’re very pleased to have worked with the team at Eildon to complete it, we were impressed with their strategic focus, standards of governance and long term approach,” she said.
“Eildon has enjoyed a long relationship with Santander with support for committed lending since 2000.
“We are very pleased to have facilitated a competitive private placement process, enabling Eildon to raise £40m from PIC, so they can continue with their programme of building affordable housing across the Scottish Borders.
“Investors were attracted to Eildon’s very sound financial performance and strong management team,” said Tony Fordham, Head of Private Placements, Santander.