Centrus advises Castles & Coasts Housing Association on £40m RCF & £30m bank term loan

What value did Centrus add?

Centrus formulated a treasury strategy for CCHA’s board to identify key funding requirements and led a competitive fundraising process, utilising market-leading insights to obtain cost-effective and covenant-supportive options, before recommending an option that aligned with CCHA’s goals.

A competitive fundraising process was structured by Centrus to enable the delivery of optimal results on key commercial terms and negotiated successfully with the chosen lenders to achieve a meaningful interest margin discount on already competitive terms.

Centrus complete project management helped deliver the project within just 14 weeks, allowing CCHA’s to achieve their targeted governance process.

How did this transaction benefit Castles & Coasts?

£30 million in term loans and a £40 million RCF will support medium-term investment in building new homes and improving current homes. Very competitive pricing achieved, resulting in £1.8 million in interest savings compared to plan assumptions and £44,000 per year savings compared to existing RCFs.

Financial, security, and key corporate covenants optimised

• Improved covenant position – enhancement of 20% for ICR  and 18% for gearing

Appropriate structuring to manage treasury risk effectively

• Significantly reduced refinancing risk by increasing bank WAL from 2 years to 6 years
• Included a 1-year availability period on term debt, providing flexibility on spend timing while minimising the cost of carry
• Enabled CCHA to execute additional embedded hedging through its term loan agreement to avoid the risk of margin calls and the impact of mark-to-market on its financial statement

“We were delighted to work with Centrus on a £30m term loan and £40m RCF to support our medium-term investment plans. Their expert advice, market insight and flexible approach helped us meet a challenging deadline and achieve excellent value for money. The team’s professionalism and attention to detail ensured an optimal outcome, strengthening our treasury position and supporting our future development plans. They provide an exceptional service – always a pleasure to work with and consistently deliver outstanding results.”

Jamie Wright, Acting Finance Director – Castles & Coasts Housing Association

For more information, please contact Tom Miller, Director, Housing, Education & Care

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