Centrus advises Gentoo on £460m restructure of its treasury portfolio

Transaction Overview

Gentoo is a leading provider of social housing with over 29,000 properties.  They provide more than 60,000 people in Sunderland with a place they can call home.

Gentoo invests millions of pounds every year to ensure its homes are safe and secure as well as building hundreds of new, contemporary houses to meet the needs of local people. 

The complex transaction, which completed on 26th January 2023, sees £360m of legacy, partly syndicated debt refinanced by a 40 year £110m private placement and £350m in bank facilities provided by NatWest, ABN AMRO, and HSBC. 

The new facilities feature more favourable financial covenants and controls, are materially more security efficient, and include £150m in new Revolving Credit Facilities to bolster liquidity and enable delivery of Gentoo’s development and stock investment programmes. 

The new funding arrangements have helped Gentoo to recalibrate covenant requirements and reporting obligations with more favourable market conventions. This will not only lead to greater administrative ease for the business going forward, but also frees up capacity, reduces risk, makes more efficient use of its assets, and positions the organisation well for the future.

The restructure has seen Gentoo achieve an A+ rating with Fitch.

Centrus worked closely with Gentoo and Devonshires to deliver this successful transaction, from initial strategy, to arranging and negotiating the new facilities, to completion mechanisms across the multiple stakeholders.

Centrus provided broad corporate finance advice to Gentoo, whilst Devonshires provided the legal advice across financing, governance, and security aspects of the transaction.

“The restructure of our treasury portfolio will further enable Gentoo to deliver our core purpose of providing safe, decent homes for our tenants and continue to play our part in the ongoing regeneration of the City of Sunderland.”

Louise Bassett, Interim Chief Executive – Gentoo

“We are delighted to have completed this complex project in what has been a challenging financial environment. The benefits of increased liquidity, modernised security arrangements and revamped covenants and corporate freedoms combine to increase Gentoo’s ability to deliver its corporate strategy. This extensive restructure of our treasury portfolio strengthens Gentoo’s platform to deliver an ambitious programme of investment in its existing homes and in new affordable homes to meet the needs of the people of Sunderland”. 

Peter Lenehan, Executive Director of Finance – Gentoo

“Gentoo has had a long-standing ambition to remove the significant legacy complexity from its funding portfolio. This transaction now realises that aim.

The transaction, which began in a stable interest rate environment, has had to navigate the challenges that 2022 brought with it. Through our close working relationship with Gentoo and the broader range of 12 financial stakeholders involved in the transaction a successful outcome has been achieved.

The restructure provides multiple benefits, including bolstered liquidity, reduced covenant risk, improved security efficiency, and an enhanced fixed floating ratio whilst retaining flexibility – all of which will support the organisation to continue investing in homes in the Sunderland region.”

John Tattersall, Senior Director – Centrus

“The deal marks the culmination of many months of planning, negotiating and implementing a bold treasury strategy against the backdrop of a variable economic environment. We’re delighted to have played our part in helping Gentoo achieve its goals and provide a robust platform on which to carry out the next exciting chapter in its evolution.”

Gary Grigor, Partner – Devonshires

For more information, please contact John Tattersall, Senior Director – Centrus

Centrus arranges £150m bank refinancing & £100m private placement for Silva

Transaction Overview

  • Silva Homes (“Silva”), owns & manages over 7,000 homes, focused on the region around Bracknell Forest. Silva is rated A+ by S&P
  • Silva has an ambitious programme to develop 1,100 new homes over the next 5 years.
  • Refinanced existing lender with 3 new facilities, totalling £150m, with maturities ranging from 5 to 15 years.
  • Silva also raised £100m 35 year private placement, including £25m 12m deferred, £25m 24m deferred.

Centrus Solution

Centrus worked closely with Silva from the formulation of refinancing & new funding strategy, to executing of new bank & PP funding.

Our team ran a multi bank and investor process allowing for wide engagement, ensuring Silva received indications from a large number of market participants and that value for money and optimal terms were received.

Centrus provided Silva with broad project management and governance support, ensuring assurance throughout the process and that outcomes achieved aligned with overarching treasury objectives.

Outcome 

  • New £150m of bank facilities from 3 lenders, more flexible financial covenants than existing, supporting long term funding, liquidity, ESG and development ambitions.
  • £100m private placement funding, for 35 years, providing long dated, low cost fixed rate funding, extending portfolio tenor, multiple deferred tranches allowing for funding to be received as and when required.
  • Overall portfolio risk reduced, tenor extended, refinancings staged over time, long term interest risk reduced, significant increase in liquidity.

“Centrus has provided high quality support in arranging these deals. Their understanding of the market, strategic guidance and project support, has been key in helping us achieve such a strong outcome and position us for the future.”

John Andrew, Finance Director – Silva Homes

“Proud to have supported Silva on these new transactions. The new funding provides a robust foundation for Silva to achieve future ambitions. Given economic headwinds & market volatility, this is a significant achievement for Silva”

Sam Goldman, Director Centrus

For more information, please contact Sam Goldman, Director – Centrus

Centrus arranges funding for DBE Energy anaerobic digestion plant 

Overview

Centrus acted as financial advisor to the management team and key shareholder of DBE Energy Limited, an anaerobic digestion (AD) plant in Surrey, England. Centrus supported them in securing investment from a fund managed by the Sustainable Private Infrastructure team of Lazard Asset Management. This transaction represents the fund’s inaugural investment in the UK market.

DBE Energy’s state-of-the-art AD plant began receiving local food waste in January 2020 and has the capacity to process 25,000 tonnes of food waste each year to produce up to 2.3 million cubic metres of clean, green, renewable biomethane, providing energy for around 700 average sized family homes per year. 

Centrus’s role was to support DBE Energy’s shareholders in securing the right financial partner to support the next phase of their growth as the management aims to diversify revenue lines through carbon capture for the local food and beverage industry, as well as potentially consolidating the food-waste AD sector.   

Our services included: 

  • Developing the business plan and financial model in collaboration with the management team.
  • Identifying the right shareholder to pursue DBE Energy’s growth plans from a broad range of financial and strategic investors and negotiating commercial terms supporting DBE Energy shareholders.

Centrus value add: 

  • A range and depth of relationships with equity investors active across the UK and Europe.
  • Expert modelling capabilities and the ability to create a management presentation that best articulates the business plan.
  • Experience in structuring complex equity and debt financings in a broad range of sectors for businesses in various stages of growth. 

Centrus supported throughout, actively managing the process from start to finish. The team used their specific sector knowledge and expertise in structuring complex financings to run a sale process. We are delighted with the outcome and look forward to the future in partnership with Lazard Investment Management.” 

Steve Sharratt, CEO of DBE Energy Ltd

“The AD market in the U.K., despite being one of the most advanced in Europe, is fragmented and thus creates significant potential for consolidation and growth. We are delighted to have completed this investment in DBE Energy, and together with its management team are looking forward to growing this partnership further.”

Robert Wall, Head of Sustainable Private Infrastructure – Lazard Asset Management

“It has been a pleasure working with the management and key shareholders of DBE Energy to secure a partner that will drive the future growth of the business. We look forward to continuing to work with the team and new shareholders as they grow their partnership. 

The UK anaerobic digestion market continues to be an exciting growth market and will play a significant role in enabling the UK to meet its net zero targets. Centrus has a deep understanding of the UK and European green gas space and are well versed in helping our clients meet their strategic objectives”

Terence Amako, Head of M&A and New Energies – Centrus 

For more information, please contact Terence.Amako@centrusadvisors.com

Centrus arranges additional £16m debt for St Arthur Homes to deliver affordable homes

About St Arthur Homes

St Arthur Homes is a Registered Provider of high quality, Shared Ownership homes in England.

St Arthur Homes currently has a portfolio of over 320 homes, plus significant pipeline over the coming years, working in partnership with a range of national and regional developers.

Specialising in s106 and grant led schemes between 20-150 units and prioritising high quality, energy efficient homes – the new funding will allow St Arthur Homes to continue providing new Shared Ownership homes to customers across the South East and Midlands.

Transaction Overview

St Arthur Homes has secured an additional £16m debt from funds advised by CBRE Capital Advisors to help deliver affordable homes.

Centrus acted as arranger to secure this additional stabilised funding from funds advised by CBRE Capital Advisors, having raised a total c.£60m of development and stabilised financing for St Arthur Homes over the past 12 months.

“It was a pleasure working closely with the Centrus and CBRE teams to deliver this portfolio refinancing covering a portion of our stabilised Shared Ownership stock. The refinancing allows us to continue our growth story of delivering fantastic affordable new build homes to our customers. Many thanks to all involved in the lengthy process in securing this raise and ensuring best Value for Money was secured in a viable manner.”

Costa Ghioules, CFO – St Arthur Homes

“We are delighted to have supported the team at St Arthur Homes again to arrange this additional funding from CBRE. We have been working with St Arthur Homes for the past 2 years and have now arranged c.£60m of debt facilities to help support the development and supply of new shared ownership homes. We look forward to working with the team to continue to support their growth aspirations over the coming years, which will see the portfolio grow significantly to help meet the significant demand for affordable homes in England.”

Scott Douglas, Assistant Director – Centrus

“This is our third loan facility with St Arthur and the first in the stabilised investment space. It has been fantastic watching the business go from strength to strength and we have very much enjoyed working with the Centrus and St Arthur teams again. We see Shared Ownership housing as being of vital importance to the UK housing market and are delighted to have advised a longstanding pension fund client on this debt investment.”

Nick Griffiths, Director – CBRE Capital Advisors

For more information, please contact Scott Douglas, Assistant Director – Centrus

Dragon School becomes the first UK Prep to raise private finance

Transaction Overview 

The Dragon School (“the Dragon”) has successfully raised a £30m debt Private Placement with a maturity of 28 years. The proceeds will be used to repay existing loans, as well as to finance new capital projects including its Net Zero Strategy and improvements to school facilities.

The Dragon School

Founded in 1877, the Dragon which is located in Oxford is widely regarded as one of the leading preparatory schools in the UK.

This is the first private placement for a Preparatory school in the UK.

Our Role 

Centrus acted as financial advisor to the Dragon, drafting a detailed information memorandum and an investor presentation which were shared with a select group of institutional investors. One investor was selected and terms negotiated to achieve the optimal result for the Dragon.

“We are all delighted with the outcome which will enable the Dragon to invest in its strategic ambitions with confidence, and know that we couldn’t have got there without Centrus’ stewardship, advice and guidance along the way.”

Martin Johnson, Chief Operating Officer – Dragon School

“Investors were impressed with the Dragon’s history, scale and track record as well as the quality of its executive and governors. We were delighted to have been appointed to arrange long term finance for the Dragon and the timing of the transaction has proved to be opportune.”

Robert St John – Centrus

For more information, please contact robert.stjohn@centrusadvisors.com

Aster Group implements titantreasury (TMS), delivered by Centrus.

Overview

Aster Group (“Aster”) has successfully completed the integration of titantreasury, the Treasury Management System (TMS) delivered by Centrus.

The group manages over 36,000 homes with a plan to deliver over 11,200 additional homes by 2030.

Aster required an integrated TMS to calculate the rate of SONIA interest rates, calculate the cost of fix rate debt as well as automate the production of accrual and payment journals.

Aster Housing Group property
Souce: Aster Group

Centrus Solution

titantreasury is an expert Treasury Management System (TMS) that offers financial departments and treasurers the best functionalities for monitoring and controlling operational market risk (rate, foreign exchange, commodities), credit and liquidity risks.

The Centrus and Aster team worked closely throughout the implementation. The client team were provided with training and support to confidently use titantreasury on a day-to-day basis.

titantreasury provides accuracy in calculating their Sonia-linked interest amounts and ensures payments are processed on time. With a complex syndicated loan, Aster can rely on titantreasury to keep on top of their capital and interest payments.

titantreasury Benefits:

  • Automatically generated month end journals.
  • Control of liquidity and Sonia linked cash payments.
  • Clear view of debt maturity ladder.
  • Enhanced cash visibility.

With optimal integration of third-party tools, Aster can automate treasury tasks, thereby limiting operational risk.

“We have been delighted with the titantreasury system since implementing, having utilised the expertise of the team to manage the debt portfolio of the group.

We now have a system which generates and automatically posts accounting entries, is efficient and accurate.

Our thanks to the team that supported us through the implementation.”

Paul Jeffries
Director of Treasury – Aster Group

“We are pleased to welcome Aster to the titantreasury family! As always, we worked closely with the client to streamline processes built around their current eco system. For the Aster treasury team, this means they now have automatic access to reports that give oversight of their liquidity positions, investments and forecast cashflows, while sending accounting journal entries to their ERP system.”

Gilles Bonlong
Director – Centrus

For more information, please contact gilles.bonlong@centrusadvisors.com

Centrus arranges £70m sustainability-linked private placement for Saxon Weald

Transaction Overview

LGIM Real Assets (Legal & General), on behalf of its Corporate Debt team, announced that it has provided Saxon Weald £70m of sustainability-linked financing, to accelerate the UK’s development of new, affordable energy efficient homes. Centrus acted as the sole arranger.

Managing approximately 6,750 homes across Sussex and Hampshire, Saxon Weald is a housing association providing affordable rented and shared ownership homes for individuals and families, as well as properties exclusively for the over 55s. The proceeds of LGIM Real Assets’ investment will be used to finance new homes, designed to be energy efficient – with Saxon Weald targeting EPC A ratings on all new builds.

With rising energy bills, the efficiency of our homes has never been more in focus. The housing sector also remains a major contributor to carbon emissions, with heating and hot water for UK homes accounting for 25%¹ of total energy use and 15%² of the UK’s greenhouse gas emissions.  If the UK is to meet net zero and be fit for the future, the housing sector requires rapid and radical change. This presents the social housing sub-sector with an immediate challenge – where private sector support will be key.

Tackling this, via a forward-thinking pricing structure with sustainability at its core, Saxon Weald will receive a discount on the coupon provided it meets ambitious energy efficiency targets – better supporting the communities in which Saxon Weald operate, and more widely, playing an important role in the South-East’s energy transition.

Highlighting Legal & General’s longstanding ESG agenda, today’s investment brings LGIM Real Assets’ ESG-linked loans in the corporate debt space to over £430m, spanning the Social Housing, Higher Education, and Corporate sectors. A significant proportion of this financing has gone towards the social housing sector specifically, supporting some of the UK’s largest social housing providers across major cities and regions* with their decarbonisation and social impact ambitions.

Centrus worked with Saxon Weald to develop strategy and provide transaction advice. Legal counsel was provided by Devonshires and Addleshaw Goddard.

“There’s a stark, deep-rooted supply-demand imbalance when it comes to good quality, affordable housing in the UK. This, with the backdrop of rising energy bills and need to transition to a low carbon economy, demands innovation within the social housing sector.

With an established track record and enduring appetite, we’re pleased to complete another significant investment in this space and further demonstrate our commitment to the future of the UK’s housing provision. This investment marks yet another example of inclusive capitalism at work, delivering a return to our pension holders whilst also benefitting our local communities.”

Steve Bolton, Head of Corporate Debt, Europe – LGIM Real Assets

“The new funding forms a core part of delivering our sustainability strategy and in continuing our objective of providing affordable homes.  I’m particularly pleased with how well the teams at LGIM Real Assets and Centrus, assisted by Devonshires, structured the new funding to fit our aim to enhance the delivery of sustainable homes for our customers.” 

Michael Chinn, Executive Director, Resources – Saxon Weald

“We are delighted to have worked with the teams at both Saxon Weald and LGIM Real Assets to structure this sustainability linked private placement. The facility will help deliver more energy efficient, affordable homes across the Southeast of England, in addition to facilitating investment in the existing stock to further improve energy efficiency.”

John Tattersall, Senior Director – Centrus

Centrus arranges £19m loan facility for Cromwood to help house domestic abuse victims.

Cromwood Housing Group,  announced the signing of a new £19.39m loan with Rothschild & Co as part of a Greater London Authority (GLA) led scheme aimed at eradicating rough sleeping, as well as providing housing for domestic abuse victims.

About Cromwood  

Cromwood Housing is a registered provider (RP) of social housing, delivering affordable homes to the people who need it the most, when they need it the most.

Transaction Overview 

The new debt facility, along with a £18.1m grant from the GLA, will allow Cromwood to proceed with the acquisition of 160 new properties. Of these, 140 will provide long term, move-on, housing for those sleeping rough in London, while the remaining 20 will be designed to house individuals fleeing from domestic violence.

Cromwood has partnered with two charities – Thames Reach, which works with people affected by rough sleeping to deliver this project, and Solace, which supports survivors of abuse, violence and exploitation. Both charities will identify suitable clients and provide a range of support to help them settle into their new homes.

Centrus Solution

The new facility, which was arranged and structured by Centrus, has a fixed rate 19-year term in line with the GLA nominations agreement and is secured against the cashflow from the acquired properties.

This transaction follows 135 properties acquired in 2021 to tackle rough sleeping with support from GLA grant and a c.£20m loan from BAE Systems Pension Fund, arranged also by Centrus. 

“This investment will enable us to provide much-needed specialist housing across London and extend our work in this area. It’s a real achievement to partner with a company of Rothschild & Co’s size and reputation to invest in social housing.


It follows on from our success with BAE Systems last year and demonstrates the key role smaller registered providers can play in attracting new investors into this market to accelerate the supply of accommodation for rough sleepers and those fleeing domestic violence and abuse.”

Moses Hirschler, Chief Executive – Cromwood

“We are delighted to have worked with the Cromwood team again, and Rothschild & Co, to put in place this loan facility, in addition to the £20m we arranged from BAE Systems Pension Fund last year. This additional funding will have a direct and positive impact on the lives of those concerned and embodies our ethos of finance with purpose.”

Phil Jenkins, Managing Director – Centrus

For more information, please contact phil.jenkins@centrusadvisors.com

Centrus advises United Westminster & Grey Coat Foundation on £35m Private Placement

About The United Westminster & Grey Coat Foundation

The United Westminster & Grey Coat Foundation (‘the Foundation’) was formed in April 2019 from the merger of United Westminster Schools and The Grey Coat Hospital Foundation. The Foundation comprises three private schools – Emanuel School in Clapham, Sutton Valence School, Maidstone and Queen Anne’s School, Reading – as well as two Academies – Westminster City School and The Grey Coat Hospital both of which are located in Victoria, London. 

The Foundation has roots formed in the 1570s when certain families within London and Kent decided to start schools for “the poor of the parish.” There have been many different configurations of its schools over the past centuries, but the Foundation currently seeks to carry out its core mission by delivering excellent education.

Transaction Overview 

The Foundation completed a £35m Private Placement debt financing, with a maturity of 30 years. Proceeds of the private placement were used to refinance existing bank debt, increase the Foundation’s investment portfolio and finance a significant element of the Foundation’s development plans for the private schools.

Centrus acted as the financial advisor to the Foundation, constructing a new financial model which consolidated the financial models of the three private schools, drafting an information memorandum and investor presentation, conducting meetings with selected investors and negotiating a Note Purchase Agreement.

“I am delighted that the Foundation has been able to raise new long term debt finance which will allow the Foundation to undertake a significant element of the Foundation’s development plans as well as increasing our investment portfolio. This will serve to enhance the schools’ facilities and benefit students at our schools for many years to come.

Centrus assisted the Foundation with some complex financial modelling and advised us through the private placement process ensuring that we achieved a long term financing on attractive terms.”

Toby Mullins, Chair of Trustees of the Foundation – The United Westminster & Grey Coat Foundation

For more information, please contact robert.stjohn@centrusadvisors.com