Cartrefi Conwy completes innovative sustainability & SONIA linked refinance to deliver 1,000 new homes

Transaction Overview

With just under 4000 homes owned Cartrefi Conwy is a leading provider of affordable, high quality homes in North Wales with a focus on innovation, both in how services are provided and how homes are built and developed.

This innovation is reflected in the refinancing now complete which sees in aggregate £39m in new funding obtained, introduction of a new banking partner, a restructure of existing covenants, and transitions bank facilities to a SONIA, largely ESG-linked basis; a first in Wales.

Existing facilities of £58.5m have been restructured and increased to £97.5m via a new single note, £25m, 30-year private placement part deferred over 2 years, and a net increase in RCFs of £14m to a total of £30m. The RCFs, along with the term bank facilities, have been transitioned to SONIA and now include margin reductions where Cartrefi Conwy meet a range of Environmental and Social KPIs. These KPIs are rooted in Cartrefi Conwy’s corporate strategy and incentivise pushing forward to maximise social impact and meet the climate challenge.

Financial covenants within existing facilities have been restated to provide additional flexibility. This includes revised financial assistance limits to facilitate on-going investment into Creating Enterprise, Cartrefi Conwy’s subsidiary that will allow expansion of existing Modern Methods of Construction (“MMC”) capabilities, supporting both the local community and delivery of more energy efficient homes.

This transaction reshapes treasury arrangements to fully support business ambition, unlocking an increased growth programme that will see 1,000 new homes delivered over the next 10 years across North Wales. Flexibility has been increased enabling elevated investment into innovative delivery models including MMC and financial risk has been reduced with bolstered liquidity, full SONIA conversion, increased portfolio longevity, and interest rate protection.

Centrus acted as sole arranger on the private placement, worked with management to develop strategy, and provided business planning and transaction advice and support. Trowers & Hamlins acted as borrower counsel, Addleshaw Goddard acted as lender counsel, and Savills’ provided valuation services.

“The new finance package allows us to bring our strategy to life is absolutely fantastic news for Cartrefi Conwy. It’s a win for our community because we’re spending our money in Wales and our tenants will also benefit from good quality, well maintained and cheap to run homes.”

Andrew Bowden, Chief Executive – Cartrefi Conwy

“For me this is all about delivering more social homes and tackling the climate crisis. That’s very much in keeping with the Cartrefi Conwy ethos. Access to the new funding package is going to propel Cartrefi Conwy to a new level. It’s the key to unlocking 1000 new doors. The skills and knowledge of the Centrus team have been essential in putting this deal in place.”

Peter Lewis, Group Director, Resources – Cartrefi Conwy

“This transaction represents a reset of funding arrangements for Cartrefi Conwy, bringing the covenants and controls in line with the broader business ambition and provides a solid foundation for future growth and investment. It also takes full advantage of the attractions of the current long term debt market to maximise value for money, proactively addresses SONIA, and leads the way in Wales to link RCFs to ESG metrics rewarding Cartrefi Conwy for pushing the envelope on energy efficiency and social impact. We have worked very closely with Cartrefi Conwy to define, shape, and deliver this transaction and are delighted to see such a strong outcome achieved.”

John Tattersall, Director – Centrus

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