Heart of Medway, an ambitious and growing registered provider with a 900-unit housing association, has recently issued a £20m private placement. Heart of Medway is part of the mhs homes group playing an important part in helping end the housing crisis in North Kent.
The £20m, 34-year private placement, comprised a £10m 3-month deferred tranche as well as a £10m 12-month deferred tranche, enabling Heart of Medway to receive funds as and when required while locking in the rate at the outset. The transaction supports Heart of Medway’s growth ambitions and highlights an interesting development in the ability of capital markets to invest in smaller HAs.
The resulting transaction provides flexible, long-term fixed rate funding directly to Heart of Medway, enabling stock improvement works in relation to fire safety, and future development.
Pension Insurance Corporation (‘PIC’) plc was the sole investor in the transaction. Centrus acted as sole arranger on the private placement, worked with management to develop the funding strategy, providing full business planning and transaction advice and support.
“This is a great deal for Heart of Medway which both supports our current development aspirations and increases our funding options in the future. We were pleased to once again work with PIC following previous investments of £70m in our parent company, mhs homes. We were particularly impressed with PIC’s flexible approach to our lending needs. I thank Centrus for their support in arranging the transaction and ensuring a great outcome for Heart of Medway.”Bruce Shelmerdine, Group Finance Director – Heart of Medway
“Delighted to have supported Heart of Medway on this transaction. The funding allows for the organisation to continue its journey towards developing its own funding base, while providing long dated and flexible financing to support its future ambitions.”Sam Goldman, Director – Centrus
“We are pleased to have worked again with mhs homes and their subsidiary, Heart of Medway in this latest transaction. PIC is an experienced investor in social housing and specialising in the design of bespoke transactions that include features such as deferred borrowing. Working with mhs has led to the development of significant local social value so far and this latest transaction will add to that. The development of social value is entirely aligned to our purpose of paying the pensions of our current and future policyholders.”Elizabeth Cain, Deputy Head of Debt Origination at PIC
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