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Bank of England support for sector tops £1bn as three more housing associations join COVID-19 scheme
The Bank of England’s support for the sector during the pandemic has now topped £1bn, after three more housing associations accessed its coronavirus liquidity scheme.
Places for People (PfP), Notting Hill Genesis (NHG) and Aster Group have been added to the list of businesses that have sold short-term debt to the bank through its Covid Corporate Financing Facility (CCFF).
Eight housing associations have now availed themselves of the scheme – set up in March to help relieve pressure on cash flows during the crisis – issuing a combined £1.025bn in commercial paper.
NHG, which has raised £100m through the CCFF, is the only participating landlord without a G1/V1 grading for governance and financial viability from the Regulator of Social Housing.
As reported by Inside Housing’s sister publication, Social Housing, housing associations that had V2 gradings for financial viability were previously blocked from the scheme.
Guidance about the CCFF previously stated that only “large housing associations that continue to be assessed as V1 grade for viability from the Regulator for Social Housing” were eligible.
However, this was reworded and it now advises that housing association applicants “will be assessed with reference, among other things, to their revenue streams”.
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Maame-Yaa Bempah, financial services director at NHG, said: “During this period of uncertainty, we welcome the support available from the Bank of England, which we expect to increase activity across the wider economy.
“Funds received by Notting Hill Genesis from the CCFF will increase short-term liquidity and help to manage risk and exposure to market fluctuations.
“Furthermore, this will assist Notting Hill Genesis in achieving our aim of providing more affordable homes to Londoners.”
PfP sold £150m in short-term debt to the bank, while Aster issued £100m through its subsidiary, Aster Treasury.
Chris Benn, group finance director at Aster, said: “Like a number of other housing associations, we’ve accessed the funding offered by the Bank of England to help mitigate the impacts of COVID-19.
“Our decision is in line with our prudent approach to risk management, including maintaining a strong liquidity position. This helps to protect our business and the services we provide to our customers.”
L&Q, Optivo, Platform, Flagship and Paragon Asra are the other housing associations to have so far accessed the CCFF.
Only L&Q sold the maximum value for housing associations of £300m.
As of 22 July, the Bank of England held commercial paper worth £18.8bn sold by 68 businesses, including household names such as British Airways, John Lewis and Rolls-Royce, and developer giant Lendlease.
The CCFF runs alongside the Bank of England’s existing Corporate Bond Purchase scheme.
