Centrus advised on the merging of Settle Group and Paradigm Housing

What value did Centrus add?

Centrus leveraged its comprehensive knowledge of each lender and the market to achieve outstanding negotiated outcomes, protecting the full value of the bank loan portfolio, increasing covenant capacity by £70m per year, and aligning covenants and controls.

Developed funding and hedging strategies that supported the client in achieving their goals, provided clarity, and simplified complex transactions. Execution of complex derivatives transactions, sale of retained bonds, and bank loans via two new funder relationships.

Strong project management skills enabled Centrus to effectively coordinate multiple stakeholders across various workstreams. Ensured that all approvals, negotiations, and transactions were completed within demanding timelines.

How did this transaction benefit SettleParadigm?

Value protection – successful merger negotiations, secured consent from over 9 funders and protected £7m of the loan portfolio’s value.

Covenants improved – covenants largely harmonised with £70m increase in annual capacity.

Existing and new funding – a £2bn loan is being restructured, along with new funding comprising £300m of new bank loans and a £150m retained bond sale.

Hedging – 4 new ISDAs with £150m of forward starting interest rate swaps and £150m gilt lock to provide interest rate certainty.

Liquidity – managed the £300m liquidity requirements of a large stock acquisition through an innovative ‘commitment letter + bridge-to-bond’ approach – saving SettleParadigm £300k in fees.

“It was a pleasure to work alongside Natalie Singh and her talented team on this highly complex transaction. By bringing together multidisciplinary expertise and maintaining disciplined project management throughout, we were able to navigate challenging and intricate negotiations and deliver an excellent outcome for our client. We were able to protect significant debt portfolio value and put in place robust treasury risk management solutions, providing SettleParadigm with a strong foundation to achieve its corporate objectives and deliver real benefits for customers. I’m incredibly proud of what we achieved collectively.”

Lawrence Gill, Director, Housing, Education & Care – Centrus

“Centrus’ commercial insight and disciplined project management helped to deliver the merger within a demanding timeline.  Their advice helped us overcome challenges that were faced, creating real and lasting value for our organisation. Centrus’ expertise and guidance throughout the analysis, negotiation, and completion of the merger were invaluable. Their strategic advice helped SettleParadigm achieve the desired outcome and protect value in complex negotiations. The Centrus team helped us manage a highly complex, multi-stakeholder process, coordinating with numerous funders and advisers to maintain momentum and alignment at every stage. Their insight into innovative financial solutions, such as gilt-locks and forward-starting swaps added value to project.”

Nicola Ewen, Chief Financial Officer and Deputy Chief Executive – SettleParadigm

For more information, please get in touch with Lawrence Gill, Director, Akhil Shah, Assistant Director or Usama Shoaib, Senior Associate, all of Housing, Education & Care.

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