Centrus arranges a £50m private placement with a £100m shelf facility for Melin

Transaction Overview

Melin is a leading registered social landlord in Wales, providing some 4,300 homes across five local authority areas, with an ambitious development target of delivering 1,000 new homes by 2025. In addition to offering homes for rent, Melin also offers properties for sale through its low-cost home ownership scheme and subsidiary Candleston.

Centrus Solution

Following a carefully orchestrated engagement with the market, Centrus arranged a £50m private placement, with Macquarie selected as the preferred investor – this represents Macquarie’s first direct investment in a Welsh housing association. The note has a final maturity of 2059 and was split across two tranches, including £20m deferred for 12 months. The agreement includes a £100m shelf facility, providing additional flexibility to meet future funding needs if/when appropriate, which we believe also represents a first for the Welsh sector. The note is unrated.

Added Benefits

In addition to attractive pricing, Melin will benefit from a covenant package with appropriate carve outs which provide substantial headroom and flexibility. Importantly, Melin has secured very long-term fixed rate finance to proactively manage treasury risks and provide a more robust platform on which to deliver its growth ambitions.

“We are delighted to have secured a long term funding package that will help deliver our growth aspirations. The certainty of future costs that this brings gives added comfort and assurance to our Board to aid future planning. The whole team at Centrus provided a great level of knowledge and support to the process which ensured the transaction was as smooth as possible.”

Peter Crockett, Deputy Chief Executive – Melin Homes

“Melin, a long-standing client of Centrus, has achieved an excellent result with this fundraising, accessing very long-term low-cost fixed rate finance, with built in flexibility aligned with its strategic objectives. Attracting a new investor is very positive for the Welsh sector overall and provides tangible external endorsement of the strength of Melin. It was a pleasure working with the Melin team to deliver a great outcome.”

Lawrence Gill, Director – Centrus

For more information, please contact lawrence.gill@centrusadvisors.com

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