Centrus advises Welsh Housing Partnership 2 (WHP2) on a new £38m Private Placement and £30m Government Loan saving £2m per annum

Transaction Overview

Welsh Housing Partnership 2 (WHP2) is an innovative arrangement between four housing associations (HAs) in Wales: Hafod Housing, Coastal Housing Group, Grŵp Cynefin and Pobl Group. WHP2 aims to increase the provision of quality, affordable housing to people in Wales who are otherwise unable to access home ownership or social housing.

WHP2 commissioned Centrus to support the refinance process, from initial funding strategy to arranging the private placement.

The transaction was complex and completed on 31st May, seeing WHP2 refinance £68m of bank debt via a new 10 year £38m fixed rate note from the Pension Protection Fund (PPF) and a 12 year £30m fixed rate loan from the Welsh Government. 

The transaction has reduced running interest costs by c.£2m per annum with the savings passed directly to the four HA partners, enabling increased investment.

Centrus Added Value

  • Investor Relationships: Centrus’ outstanding network of lender relationships enabled a smooth and highly efficient market engagement process with our team of advisors coordinating the development of an information memorandum (IM) and engaging with over 20 banking and institutional lending partners, ensuring WHP2 found the right partner and the best deal.
  • Benchmarking and Insight: Centrus’ constant market engagement and transaction track record enabled informed analysis and benchmarking of terms offered to WHP2, resulting in confident negotiations, optimising  structuring and maximising value for money.
  • Comprehensive Service: Our support was end-to-end, with guidance and tenacity provided to unblock problems, ensure security, valuations and loan documentation were appropriately completed, and deliver assurance reporting to evaluate the transaction versus initial objectives

“Whilst the structure is by nature complex and leveraged, the refinancing now complete stabilises the WHP2 financial profile, reducing costs to the partners, whilst ensuring these homes are available for the longer term. It has been great to see PPF and Welsh Government support the partnership and recognise the value add we make to the Welsh housing sector.

We are grateful for the expertise and support of our advisors at Centrus and Devonshires whose market knowledge, investor relationships, and commitment to delivery have ensured we successfully navigate through a complex process and market. Centrus’ ability to be tenacious, focused and assist us with unblocking issues as they arose was critical to getting us over the line, whilst ensuring we had confidence in our decision-making.”

Simon Jones, Chair – Welsh Housing Partnership 2 Ltd

“Securing this refinance is a fantastic achievement for WHP2 and its members and ensures much needed affordable housing is available to those that need it in Wales.  

Given the very structured and highly leveraged nature of the vehicle, delivering the funding was challenging and I’m grateful for the efforts of both my colleagues and all stakeholders involved at WHP2 alongside the flexibility and professionalism of PPF to get this deal done.

It was a pleasure for Centrus to be involved in this process and the competitive terms received for WHP’s funding needs underline both their excellent business credentials and the continued strength of investor appetite for the affordable housing sector as a whole. We look forward to continuing to work with WHP2 going forwards.”

John Tattersall, Managing Director – Centrus

For more information, please contact John Tattersall.

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