Archives: Credential

Transaction Overview

Based in Chelmsford, CHP owns and manages 10,000 homes throughout Essex, enabling economies of scale and geography to be harnessed as reflected in strong financial performance and peer group benchmarking results.

With its track record of development, CHP’s vision is to provide a new home every day and to delight its customers. CHP has a strong ‘A’ rating from S&P and the strongest possible ratings for governance (G1) and financial viability (V1) from The Regulator of Social Housing. CHP is also frequently recognised through external awards and accreditations.

Centrus Solution

Centrus has been the retained corporate finance advisor to CHP since 2017, and has previously successfully advised on CHP’s retained bond sale through its Myriad Capital PLC subsidiary.

Following a comprehensive funding options appraisal, it was determined to raise up to £100m from the bank market as flexible liquidity to support the development program. Within the context of undertaking a competitive procurement exercise, we engaged constructively with existing relationship banks, Lloyds and Barclays, to establish if ‘win-win’ outcomes could be achieved, including unlocking additional development capacity for the future.

Added Benefits

The outcome of this comprehensive approach was a very positive response from the existing banks and from a range of prospective lenders, enabling CHP to benefit from a multitude of choices and to consequently optimise the terms and conditions, including the cost of funds.

“CHP had two main aims in this process: Maximising capacity for growth and increasing liquidity in these uncertain times. I’m delighted to say that we have achieved both of these – building on our strong relationships with existing lenders Lloyds and Barclays and starting a new relationship with National Australia Bank too. We’ve set up the right treasury structure to deliver our ambitious new corporate plan which focuses on building a home per day, and at the same time increased our secured revolving credit facilities to act as further risk mitigations.

The Centrus team, throughout the project, added huge value and were instrumental in helping CHP deliver a great result. The Information Memorandum they produced for us provided everything the prospective lenders needed in order to produce really competitive terms. They then worked with my team and the Board to select and negotiate the best terms from the three lenders.”

Paul Edwards, Deputy Chief Executive and Chief Financial Officer – CHP

“CHP have achieved a truly excellent result, enhancing existing strong banking relationships including unlocking additional development capacity at negligible cost, whilst at the same time establishing a new relationship with NAB which fits well with the overall treasury mix and enables strategically important diversification of funding. We were delighted to work with CHP, delivering outcomes that exceeded expectations and which leave CHP optimally placed to maximise growth opportunities.”

Paul Stevens, Managing Director – Centrus

Transaction Overview

The University of Oxford’s St Anne’s College has recently undergone £25m worth of long term financing, arranged by Centrus. With its origins dating from 1879, St Anne’s was incorporated by Royal Charter in 1952 and is now one of the largest mixed colleges amongst the University of Oxford’s 38 independent colleges with a total of approximately 800 undergraduates, graduates and visiting students.

During 2018 St Anne’s undertook some detailed financial analysis regarding the refurbishment of some of its student accommodation as well as investigating the options for a new development on the college’s site. A decision was taken by St Anne’s Governing Body in November 2018 to proceed with the new debt financing to be used partly to refinance existing bank debt and partly towards capital expenditure on the college’s site.

Having received several financing proposals, an institutional investor was selected which offered 40 year term debt. The financing was split into 2 tranches with £10m drawn down at closing, the proceeds of which being largely used to refinance existing debt. Settlement and draw down of the second tranche of £15m will be deferred for 3 years until March 2022. The proceeds of this tranche will be used towards the cost of new student accommodation on the college’s site.

“We have ambitious plans to develop our site and provide new purpose built student accommodation. This financing provides us with the resources we need to realise our ambitions and we are delighted to have locked in long term debt finance at an attractive cost with draw down deferred until the funds are required. Centrus advised us throughout this project both with our financial modelling and forecasting as well as assisting us in negotiating very competitive terms for the financing.”

John Ford, Treasurer – St Anne’s

“There was strong demand from the institutional market for the St Anne’s financing reflecting the quality of the college’s governance, management, track record and development plans. An unusual feature of this financing was the £15m deferred tranche which has allowed St Anne’s to lock in a very attractive fixed rate for the next 40 years but with settlement delayed until the new building development is underway.”

Robert St John, Managing Director – Centrus

For more information, please contact robert.stjohn@centrusadvisors.com

Transaction Overview

Advised by Centrus, Livin Housing has today finalised a complete debt refinance. The £64.5m legacy LSVT syndicated facility was split into three new bi-lateral facilities totalling £120m.

Livin was established in 2009 by a stock transfer from Sedgefield Borough Council (now part of Durham County Council) and provides over 8,400 homes within County Durham.

The transaction sees a £64.5m fixed-rate syndicated loan refinanced via a £65m long-term institutional private placement provided by Pension Insurance Corporation (PIC). This note comprises three maturities with a blended weighted average life of 38 years and a very attractive coupon. Break costs associated with the refinance have been funded by a 10-year loan from AIB, with Lloyds providing a new £30m five-year RCF to meet liquidity and development costs.

Despite the high levels of break costs incurred to exit the legacy LSVT loans, the refinance will materially reduce Livin’s interest cost, yielding an NPV saving of over £14m in just the first 10 years whilst increasing the longevity of its financing portfolio. Covenants and controls have also been streamlined to ensure Livin is able to access greater capacity, whilst also optimising its long-term financial resilience. The success of this transaction shows that housing associations limited by LSVT covenants can restructure and secure attractive long-term flexible finance from the institutional market.

This was a complex refinancing with numerous stakeholders involved and its successful completion puts Livin in a strong and well capitalised position from which to continue its successful social business.

Centrus acted as sole financial advisor to Livin and placed the private placement.

We are delighted to have achieved such a positive outcome. The Board have established a clear vision for the future of our business and the new funding arrangements provide an excellent platform from which we can invest further in providing great homes and sustaining strong communities.

We are grateful to Centrus, for their invaluable support throughout the process, and to Lloyds, AIB and PIC, for their continued commitment to the sector and for helping us to achieve our social aims.

Sean Brodie, Executive Director of Finance and Development – Livin

Livin’s strong financial profile and clear business model attracted keen interest from banks and institutional investors. Competitive pricing on the new facilities have delivered substantial savings net of break costs. In addition, Livin has significantly increased its financial flexibility and delivery capacity to the ultimate benefit of its residents.

John Tattersall, Director – Centrus

For more information, please contact john.tattersall@centrusadvisors.com

Transaction Overview

Centrus has supported Broadland Housing Association by advising on a £50m private placement. The Notes, which have a final maturity of 35 years, were placed with BAE Systems Pension Funds. An initial tranche of £20m was drawn at closing with draw down of the remaining £30m deferred until 2019.

The Norwich based landlord intends to use proceeds from the £50m Private Placement with BAE to support a development programme to build new affordable rent and shared ownership homes. The deferred element gives Broadland certainty over future interest costs and future funding.

The transaction demonstrates the continued institutional funding capacity and appetite for long dated finance from the Social Housing sector.

“By securing long term debt capital at an attractive all in cost Broadland is now in a position to finance the construction of up to 600 new affordable homes. In order to match the timing of the requirement for finance with the construction programme, BAE agreed to defer draw down of the majority of the funds until 2019 while fixing the coupon on the full £50m at the time of pricing.  We are delighted to have assisted Broadland in meeting its development aspirations.”

Robert St John, Managing Director – Centrus

“This was Broadland’s debut on the capital markets and involved a learning process for us. Centrus was key to guiding us through the process and managing the tender process which resulted in a highly competitive and flexible deal with an investor we are looking forward to working with.”

Julian Foster, Executive Finance Director – Broadland

Transaction Overview

Crown Simmons Housing is a not-for-profit Registered Provider of affordable housing working in the south east of England and parts of London and owns or manages more than 700 homes. Established in 1959 to provide high-quality homes in great locations, Crown Simmons works in partnership with local councils, developers, funders, Homes England and public sectors bodies. Crown Simmons gives single individuals, couples and families the opportunity to rent or own a home of their own.

Crown Simmons Strategic Plan 2017-2021 “Better, Stronger, Smarter” sets out the clear ambition that, by 2021, it will continue to be a thriving, local, customer-focused social business providing more homes and better services for residents. Remaining an organisation that ‘punches above its weight’ in fulfilling its Mission to provide homes and services for people on low to average incomes.

A long standing client of Centrus, we initially provided M&A advice when Crown Simmons was established through merger in 2014. Following a strategic treasury review and options appraisal, Centrus led on this fund raising exercise to procure £10m of additional finance from the bank market. The outcome of this comprehensive approach was a very positive response from a range of prospective lenders but ultimately agreement to mandate an existing lender to Crown Simmons which provided the optimal all round package of terms.

“The new facility will support our growth ambition to add a further 100 homes to our portfolio over the next five years through new development and acquisition. We have two schemes on site at present producing 39 homes for shared ownership and affordable rent, and we are also working with Elmbridge Council to acquire a number of homes for use as temporary accommodation – all funded from existing resources. This new funding will allow us to secure a number of new projects to add to our development pipeline in Surrey, Sussex and south west London.”

Paul Yates, Chief Executive – Crown Simmons

“We were delighted to work with Crown Simmons on this important fundraising exercise. Centrus works with a wide variety of Registered Providers, from the largest in the UK to smaller, local, social businesses like Crown Simmons, but what unifies this activity is our commitment to maintaining strong relationships and our desire to deliver optimal outcomes.”

Paul Stevens, Managing Director – Centrus

Longstanding Centrus client A2Dominion Housing Group has closed a secured funding of £50million, with settlement deferred to March 2020, a final maturity of March 2045 and a weighted average life of 20 years. This has been priced at a fixed coupon of 3.514%. The transaction is designed to refinance future maturing secured loan facilities.

The funding was provided by Phoenix Group, Europe’s largest life and pensions consolidator. This further strengthens the Group’s liquidity and will enable it to continue to grow and proceed with new development opportunities.

“This long-term funding further demonstrates the prudent and forward looking financial strategy we have in place at A2Dominion. We are pleased to have worked with Phoenix to agree new funding with a deferral period and will continue to look for similar opportunities to support our aim to provide high quality homes and invest in local communities.”

Dean Tufts, Executive Director (Finance & Strategy) – A2Dominion

“We are very pleased to have assisted A2Dominion in improving its liquidity so that it can meet its objectives of expanding its provision of high-quality homes and investing in the communities where it operates.”

Robert St John, Managing Director – Centrus

“We are delighted to be supporting A2Dominion’s strategic plans to deliver more homes in southern England. This transaction provides long-term funding tailored to A2Dominion’s development plan as well as providing a high quality stream of cash flows to match our pension liabilities.”

Scott Robertson, Head of Financial Management Group – Phoenix Group