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Kent-based provider secures £30m from specialist pensions insurer
A specialist insurer of defined benefit pension schemes has made a second private placement investment of £30m with Medway Housing Association.
The deal is the Pension Insurance Corporation’s (PIC) fifth transaction, with the landlord involving £160m of lending as part of a long-standing partnership.
The firm, which has £44.9bn in financial investments and insures 339,900 pension scheme members, has invested heavily in the affordable housing sector over the past decade.
The funding will allow Medway, part of the MHS Homes group, access to flexible, long-dated funding against a backdrop of a challenging macroeconomic environment across the social housing sector.
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Founded in 2010, the landlord provides more than 900 affordable and shared ownership homes to over 1,800 people in Kent.
This latest transaction with PIC is split across two tranches, £20m at the start and £10m deferred by 24 months, both carrying a 20-year maturity.
PIC was the sole investor on the transaction, while Centrus acted as sole arranger.
Bruce Shelmerdine, group finance director at MHS Homes, said: “Over the last 10 years, Heart of Medway has grown from a fledgling housing association that built its first home in 2011, to a well-respected provider with a strong delivery record.
“There’s a huge demand for affordable housing in Kent and this new private placement, a result of our long-term relationship with PIC, will help us continue to meet the needs of our local communities. We’re pleased to have worked again with PIC and Centrus to secure this funding, which will allow us to build more affordable homes for people who desperately need them.”
Celia Franch Lopez, debt origination manager at PIC, said: “We are delighted to have again invested in Heart of Medway. PIC continues to be an active lender to housing associations as investment in this sector generates social value while meeting our need for long-term, secured cash flows to match our liabilities.
“This allows us to fulfil our purpose to protect PIC’s policyholders’ payments over the long term, and benefits tenants who will live in the homes built as a result of our long-term partnership with Heart of Medway.”
In November, PIC made its first direct equity investment in affordable housing with a £50m deal to build 125 homes, while targeting up to 1,000 homes in the long term.
The specialist insurer of defined benefit pension schemes said the new investment was part of a “long-term” partnership with London Square, the developer, and Square Roots, its for-profit subsidiary.
PIC is aiming to invest £500m over the next five years to build around 1,000 affordable homes.
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