Centrus arranges £30m private placement for Heart of Medway 

Transaction Overview

Founded in 2010, Heart of Medway is a registered provider of social housing and is a subsidiary of the mhs homes group. The Housing Association provides over 900 affordable and shared ownership homes to over 1,800 people in Kent.

In November 2023, Heart of Medway secured a £30m private placement transaction with Pension Insurance Corporation (“PIC”) which was split across two tranches; £20m drawn at spot and £10m deferred by 24 months, both carrying a 20-year maturity. The transaction allowed Heart of Medway to access flexible, long-dated capital markets funding against the backstop of a challenging macroeconomic environment.

Centrus Solution

Centrus acted as sole arranger which involved working with Heart of Medway to develop an optimal financing strategy while providing ongoing advice, business planning advice and support throughout the process. 

The funding package will help Heart of Medway to support its future growth ambitions and achieve its long-term goals. As an existing lender to the company, PIC was keen to lend further support to the business by helping to tackle the ongoing housing crisis throughout England.

“Over the last 10 years, Heart of Medway has grown from a fledgling housing association that built its first home in 2011, to a well-respected provider with a strong delivery record. 

There’s a huge demand for affordable housing in Kent and this new private placement, a result of our long-term relationship with PIC, will help us continue to meet the needs of our local communities. We’re pleased to have worked again with PIC and Centrus to secure this funding which will allow us to build more affordable homes for people who desperately need them.” 

Bruce Shelmerdine, Group Finance Director – mhs homes group

“We are delighted to have supported Heart of Medway in securing £30m of competitively priced long-term funding to support its growth ambitions. 

The PP was structured to help minimise costs, with £10m undertaken on a 2-year deferral, to support business requirements while accessing a highly competitive rate. Use of master PP agreement from a prior Centrus arranged issuance, allowed a quick execution time with the process completed within two months, ensuring Heart of Medway could transact at the most optimal time and benefit from the recent Gilt pull back.” 

Tom Miller, Assistant Director – Centrus

For more information, please contact Tom Miller.

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