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

The transaction sees £360m of legacy, AMRO, and HSBC. partly syndicated debt refinanced by a 40 year £110m private placement and £350m in bank facilities provided by NatWest, ABN  

Centrus Solution

• Centrus supported the development of Gentoo’s treasury strategy, which was refined in response to 2022’s market turbulence to ensure best outcome was achieved.
• We led a competitive bank process to raise £150m in new RCFs, alongside leading negotiation with existing banks.
• Simultaneously, Centrus advised and arranged the £110m private placement – the fundraise was oversubscribed, leading to a tightly priced issuance.
• We worked closely with Gentoo and the broader range of 12 financial stakeholders to deliver this successful outcome.

Added Benefits

The new facilities feature more favourable financial covenants and controls, are materially more security efficient, and enable delivery of Gentoo’s development and stock investment programmes. 

In addition, the harmonised facilities have helped to recalibrate covenant requirements and reporting obligations – leading to greater administrative ease for the business going forward, 

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

“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

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