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Fortis Living and Waterloo Housing form Platform Housing Group

Overview

Centrus has supported its client Fortis Living in its merger with Waterloo Housing Group to form Platform Housing Group. The combined business will be a major investor and developer of affordable housing in the Midlands region, managing over 45,000 homes.

Centrus acted as corporate finance adviser to the two associations in key lender negotiations and we are pleased to have helped bring this transaction to a successful close.

“We have worked with Centrus as our treasury advisers for some time and they were able to use their knowledge of our portfolio and experience with a range of combinations and group restructures to help us get over the line. We are pleased also that we have protected important commercial relationships with our funders and positioned the group well for the future.”

Andy Howarth – Group Finance Director

“Every merger is different. In this case there was a clear commercial strategy which Fortis and Waterloo had developed which protected value for money and which we supported with specific advice and commercial support as required. It is great to see another major transaction reach a successful financial close.”

Jonathan Clarke, Managing Director – Centrus

Centrus is the leading adviser for mergers and restructures in the housing sector and have continued to innovate to support the timely delivery of these transactions for the benefit of all stakeholders.

Metropolitan & Thames Valley Merger

Overview

Centrus advised and supported Metropolitan Thames Valley on the Treasury consents and lender negotiations relating to the Partnership of Metropolitan Housing Trust and Thames Valley Housing, further advancing our leading role in M&A in the Housing Sector.

Metropolitan Housing Trust and Thames Valley Housing have recently completed a Partnership under the brand of Metropolitan Thames Valley Housing (MTVH). The Partnership will be amongst the largest housing associations in the UK and will have the capacity to build 2,000 homes every year. The Partnership will own/manage over 57,000 homes across England, with an annual turnover in excess of £400 million. The strategic focus builds on the shared commitment of enabling people and communities to thrive through investment and service provision whilst meeting the rising demand for housing through the development of a range of rented and shared ownership and outright sales units.

Our Role

Centrus’ role as strategic treasury advisor saw our expertise and market insight leveraged to obtain the consent and support of existing lenders for the Partnership, alignment of covenants with a 45% net increase in debt capacity, whilst retaining over 60% of value in legacy lending arrangements. The new group is well placed to combine the financial strengths of the individual entities, developing new homes and services, based on enhanced financial resilience and debt capacity. Centrus’ role also included advice around debt capital markets (DCM), derivatives, credit ratings, accounting and treasury management.

“John Tattersall led the project team on behalf of Centrus in what were at times difficult and time consuming negotiations. He provided the focus, drive and impetus to keep the negotiations and project to schedule and coordinated the regular Board briefings. The completion of the Partnership in October 2018 is a testament to his hard work.”

Donald McKenzie, Director of Corporate Finance & Deputy Company Secretary – Metropolitan Thames Valley

Centrus offers Risk Reporting & Derivative Valuation Services for Virgin Atlantic

Centrus has been selected by Virgin Atlantic, a major airline operator, to support its treasury team on their efforts to manage its currency and fuel price business exposure. With a previous scenario of reporting and analytics being run through a number of systems along with spreadsheets, a resource intensive and operationally risky process, the company approached us with the need to streamline processes, while upgrading quality of valuations and risk management capabilities.

Centrus’ role as strategic treasury advisor and technology provider allowed Virgin Atlantic to rely on a suite of valuations and risk management reporting on its FX and commodity exposure. The company’s Fuel and FX hedging portfolio was uploaded to our risk and valuation platform, as well as business exposures. Automatic feeds between trading systems and our platform were set up and reporting deliverables were fully customisable to meet Virgin Atlantic’s needs.

“The Centrus Analytics platform has enabled us to reduce the number of treasury systems in use, delivering a significant cost saving to the company. Our reports come through early each morning, fully customised to our requirements. This enables us to make informed decisions sooner and frees up capacity within the team.”

Paul Robbins, Portfolio Risk Manager – Virgin Atlantic

For more information, please contact gilles.bonlong@centrusadvisors.com

Centrus advises Red Funnel on the lease financing of Red Kestrel

Red Funnel, the Southampton to Isle Of Wight ferry operator has ordered a new roll on-roll freight ferry, to be named Red Kestrel.

Centrus acted as financial advisor to Red Funnel and arranged the lease financing of Red Kestrel. This is the second vessel this year on which Centrus has advised Red Funnel in arranging pre and post-delivery financing. Centrus ran a competitive tender for the financing and advised Red Funnel throughout the negotiation and closing of the financing.

Red Kestrel will provide additional year-round freight capacity for Red Funnel’s Southampton-East Cowes route which currently handles 53% of all freight movements across the Solent. The new ship is being built by UK based shipbuilder Cammell Laird and is expected to be delivered to Red Funnel in spring 2019.

“We are delighted to have once again assisted Red Funnel in securing long term lease finance for its investment in Red Kestrel, which builds upon the successful financing of Red Jet 7 earlier this year.”

Centrus Team

Centrus offers financial arranging, structuring and advisory services to the international shipping markets. We cover a variety of shipping assets and a range of market segments. We provide proprietary and cutting-edge services, tailor-made to meet clients’ needs, whether it is new finance or restructuring existing facilities.

Centrus advises on innovative £200m early financing of Mutual Energy’s Gas to the West project

Introduction

Mutual Energy, a mutual company, was founded in 2005 with the objective of owning and operating vital energy infrastructure in the long-term interests of Northern Ireland’s energy consumers.

Centrus is pleased to announce that financial close has been reached on the c.£200m financing of Mutual Energy’s ‘Gas to the West project’ in Northern Ireland. The project is an extension of the gas network in Northern Ireland to Coalisland, Cookstown, Derrylin, Dungannon, Enniskillen, Magherafelt, Omagh and Strabane.

Centrus Solution

Centrus acted as sole Financial Advisor to Mutual Energy and has supported the company in the development of its financial and commercial strategy for the Project, from its original bid to be awarded the regulatory licence through to Financial Close. The successful c.£200m finance raising was completed with a single funder, Legal and General Investment Management and will be repaid over c.36 years.

Centrus led the advice on developing the deal structure that enabled long-term 100% debt financing for the project with greenfield risk without undermining the credit rating and ultimately the cost to the consumers of NI. Centrus also added value by inter alia, providing advice on various financing structures and options, obtaining a credit rating, selection of a preferred funder and negotiation of documentation.

“Having worked with the Mutual team for a number of years on the project, we are delighted to have advised them from the successful bid for the licence all the way through to the successful delivery of this innovative financing package. We believe this financing demonstrates the value of the Mutual model with the energy consumers of Northern Ireland gaining the entire benefit of the substantial improvement in the cost of capital in comparison to the 2014 bid position.”

Jason Murphy, Managing Director – Centrus

“Centrus worked tirelessly to help deliver a fantastic deal for customers which means that the cost of debt repayments will be around 35% less than they were expected to be when Mutual won the Gas to the West tender in 2014.  This amounts to an additional saving of about £50m in present value terms over and above the customer savings already expected from the bidding process.”

Gerard McIlroy, Finance Director – Mutual Energy

For more information, please contact jason.murphy@centrusadvisors.com

Centrus advises on largest ever housing sector merger and debt restructure: Clarion

Overview

The merger of Affinity Sutton Group and Circle Housing Group into Clarion Housing Group represents the largest debt restructuring to take place in the housing sector to date, creating an organisation with c. 125,000 units, annual turnover of >£800m, operating surplus of c.£200m and a £4bn+ debt portfolio. This was delivered, with full lender consent, an attractive covenant package, and protection of flexibility around corporate activity. In addition, a simplified and clean corporate structure has been delivered with “numerical apportionment” used for loan security allowing a highly efficient security position. All of this was delivered whilst protecting substantial value across the combined treasury portfolio.

Centrus Solution

This outcome leveraged Centrus’ insightful support and intelligence at every stage in what was a highly complex process that assisted management to effectively negotiate and directly engage with lenders from a strong and informed position. The process drew in Centrus’s expertise across banking, debt capital markets, derivatives, accounting and financial modelling, demonstrating the breadth of interrelated issues that needed to be drawn together.

The process concluded with clear assurance to Circle and Affinity that the outcome was optimised and fit for purpose; Centrus worked closely with operational management, including presentation at boards and various committees to ensure this outcome was secured.

For more information, please contact phil.jenkins@centrusadvisors.com

Funding and Group Restructure Delivers Major Capacity Gains for Your Housing Group

Overview

Your Housing Group this week has successfully completed its group restructure. The five core Registered Providers have been combined into one entity, renamed Your Housing Limited (YHL), which will own and manage more than 28,000 homes across the North West. As part of this process, circa £460m of the group’s finances and underlying security arrangements have been restructured.

This was a complex transaction with a large number of moving parts and stakeholders, resulting in a major simplification of the group structure. The group now comprises a non-asset owning parent company, with YHL as the main asset-owning subsidiary and Frontis as a for-profit RP holding a range of social housing and other assets.

One former stock transfer association within the group, previously with a non-coterminous board (Moorlands HA), has been transferred into YHL while two other former stock transfer associations (Leasowe and Derwent & Solway HA) have now left the group.

Centrus acted as financial advisor to Your Housing Group and Devonshires provided legal advice.

“This transaction increases financial capacity and reduces operational risk. It allows us to focus on running and developing the business. Your Housing Group now has a clear and robust platform to take forward our strategic aims and we are excited for the future. We have worked with Centrus and Devonshires throughout at a strategic and transactional level and their support has been much appreciated.”

Jeremy Earnshaw, Chief Financial Officer – Your Housing Group

“Your Housing Group have dramatically improved their treasury flexibility, raised additional liquidity, obtained more freedom to deliver new homes on a variety of tenures, and retained a significant amount of economic value in historic financing relationships. We are pleased to have supported YHG in securing this excellent outcome.”

John Tattersall, Senior Director – Centrus

The nature and complexity of the transaction called on a multitude of legal services ranging from banking and corporate advice to pensions and governance support. We employed a dedicated team of sector-renowned lawyers to help Your Housing Group navigate these complex issues to ensure that YHL is better aligned to achieve its business aspirations.

Gary Grigor, Partner – Devonshires

Centrus advises Riverside on Impact merger

Transaction Overview

Centrus has underlined its already strong credentials in advice around housing sector mergers & acquisitions by advising Riverside Group on its partnership with Impact Housing Association.

Impact Housing Association officially became a subsidiary of The Riverside Group on Monday 20 August 2018, following a vote by the association’s shareholders, ending a period of uncertainty over the future of the 2,770 home Workington-based housing association.

Our Role

Centrus was appointed by Riverside to support the development and implementation of the treasury strategy and lender engagement process relating to the merger.

The advice provided by Centrus to Riverside spanned portfolio valuation & analysis, business planning and financial covenant implications and consideration of Riverside Group financial support to Impact.

This mandate further reinforces Centrus’ leading role in housing M&A, including situations where regulatory intervention has led to subsequent merger, including advice to Places for People (Luminus), Places for People (Derwent) and Wales & West (Cantref).

For more information, please contact Paul Stevens, Managing Director – Centrus

Macquarie implements titanTreasury

Overview

Macquarie, the global provider of banking, advisory, trading, asset management and retail financial services has become the latest financial institution to select titanTreasury platform, delivered and supported by Centrus and 3V Finance.

Macquarie is a diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities.

titanTreasury is an easy to implement solution which combined with Centrus’ debt & derivative expertise, allows funds to efficiently manage their debt and derivative operations. The platform offers transaction management, risk management, accounting and reporting which can be interfaced with multiple 3rd party systems. titanTreasury supports all asset classes including inflation-linked debt.

“We are delighted to welcome Macquarie, one of the leading investors in the Infrastructure space, as a client to the titanTreasury  platform. We are really looking forward to working with Macquarie’s team during the implementation process to ensure a successful project and long-term collaboration. We are also very excited that we are continuing growing titanTreasury presence in the funds sector.”

Gilles Bonlong, Director – Centrus

For more information on titanTreasury, please contact Gilles Bonlong, Director at Cetrus.