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