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West London housing association secures £190m deal with three banks
A west London housing association has secured £190m of debt finance in a major deal involving large Irish, Japanese and Australian banks.
Shepherds Bush Housing Group has arranged the finance from Macquarie Infrastructure Debt Investment Solutions (MIDIS), Mitsubishi UFJ Financial Group (MUFG) and Allied Irish Bank (AIB) to fund the development of 2,000 homes over the next 10 years and investment in its existing stock.
The 5,000-home housing association secured a £30m, three-year revolving credit facility from Japanese bank MUFG which will be refinanced by a long-term private placement of £50m from Australian MIDIS.
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MIDIS has also agreed a £100m ‘shelf facility’ with the housing association – a signed agreement which allows the housing association to borrow additional funds under the same or very similar terms to those agreed today.
A further £40m of lending has come from AIB.
The deal marks MIDIS’s third deal with the sector following a 2017 deal with Havebury Housing Partnership and a 2015 loan to Cottsway Housing Association.
Gareth Edwards, associate director in MIDIS, said the bank is targeting further deals with associations in deals of up to £150m.
“The social housing sector benefits from stable revenues and the rent cut has been met positively by the sector,” he told Inside Housing. “We look forward to continuing to support the sector in meeting its ongoing funding needs to increase the provision of social homes, given the national shortage.”
Sanjay Narbheram, director of housing finance at MUFG, said: “We are delighted to have supported SBHA, particularly as it represents their first combined bank and institutional debt transaction. The strength of Shepherds Bush Housing Group’s credit allowed us to run a competitive process to source institutional funding, which resulted in us successfully working with MIDIS.”
Mohit Jain, director of finance and development at Shepherds Bush Housing Group, said: “We are aiming to significantly expand our development pipeline over the next few years and are very pleased with the financing achieved with MIDIS, which has taken a long-term outlook on our business, and shown flexibility and willingness to listen to our funding needs. We look forward to building a long-term partnership.”
The loans will add to the Shepherds Bush Housing Group’s £157m debt portfolio. It will invest in the development of shared ownership and affordable housing in and around its base in Hammersmith & Fulham in west London.
