Jigsaw Homes Group was looking for a solution to help the team transition away from legacy spreadsheets and move to a single point-of-truth solution to help with the daily management of complex debt structures.
The group’s debt portfolio comprises external bank debts containing embedded fixed rates, variable rates and bonds.
Jigsaw required an integrated TMS that would help with a flexible workflow process, calculate cashflow forecast, cost of debts and accounting accruals. It was important to have a bespoke solution that would help the users achieve more efficient reporting
Centrus Solution
titanTreasury is an expert Treasury and Risk Management System (TMS) that offers finance departments and treasurers the best functionalities for monitoring and controlling operational market risk (rate, foreign exchange, commodities), credit and liquidity risks.
Centrus worked closely with Jigsaw throughout the implementation, providing the team with training and support to use titanTreasury comfortably.
titanTreasury provides accuracy in calculating interest amounts and ensures that payments are made on the exact dates.
Value Added
titanTreasury benefits:
Immediate access to treasury committee reports and accounting reports.
Control of cash payments.
Clear view of debt maturity ladder.
Access to a compliance diary to track covenants review.
With streamlined financial operations, the Jigsaw team is better able to focus on its target of solving the housing crisis in the North West and East Midlands regions.
“The process of getting the detail of all our debt into titan was made as easy as possible for us. The training we received was tailored to our requirements.”
Mark Wood, Head of Treasury – Jigsaw
“Use of the system should remove a lot of manual processes and checking, particularly at month and quarter ends, improving internal efficiencies.”
Karl Hearfield, Assistant Director of Treasury and Development – Jigsaw
Anchor, England’s largest not-for-profit provider of housing and care for people in later life, has secured two new private placement shelf facilities totalling £150m from LGIM and Sun Life. The LGIM facility totals £100m and Sun Life facility totals £50m. £25m in aggregate was drawn at completion of the facilities with the remaining £125m available for general corporate purposes, including the development of additional homes, over the coming years.
Anchor manages almost 55,000 homes for both rent and sale to those aged 55 and over, serving more than 65,000 residents. Anchor is looking to grow the number of energy efficient homes it provides through development and care home acquisition. Through its development programme, Anchor anticipates delivering an average of at least 500 homes a year over a rolling 10-year period in addition to growing the number of homes for people in residential care.
Centrus’ Role
Centrus acted as financial advisor and arranger on the transactions, working closely with Anchor from the formulation of refinancing and funding strategy, to executing of PP funding.
Our team ran a wide investor marketing process allowing for targeted engagement while ensuring that the optimal terms were negotiated and received.
Centrus provided Anchor with broad project management and governance support, ensuring assurance throughout the process and that outcomes achieved aligned with overarching treasury objectives.
“These facilities will help us to continue to increase our provision of affordable and energy-efficient homes for people in later life. We anticipate ongoing strong demand as, with an ageing society, the need for such properties has never been greater.”
Amanda Holgate, Chief Financial Officer – Anchor
“We are delighted to have supported Anchor by arranging these £150m facilities from Legal & General Investment Management and Sun Life Capital Management. This transaction provides diversification to Anchor’s already significant financing base and allows them to quickly access additional long-dated capital markets funding at short notice, helping deliver more high-quality, energy efficient homes for those in later life.”
Scott Douglas, Director – Capital Markets at Centrus
Centrus successfully supported Jigsaw Homes Group in obtaining new funding and optimising its treasury portfolio, unlocking significant capacity to deliver new homes.
Centrus was appointed as Jigsaw’s retained treasury advisor in April 2023, marking the beginning of a strategic partnership aimed at further optimising Jigsaw’s treasury operations.
Starting with a comprehensive treasury strategy review, the work focused on renewing Revolving Credit Facilities (RCFs), funding Jigsaw’s development programme and optimising and harmonising covenants and controls. Centrus’ approach involved a thorough examination of all treasury aspects including funding and liquidity, benchmarking, and credit rating analysis.
“The report demonstrated an understanding of our financial and treasury landscape and while our treasury portfolio was already robust and well managed, Centrus broughta clear delivery pathway, which has allowed us to obtain the new facilities we needed while optimising our portfolio.”
Rosie Marsh, Operations Director – Finance at Jigsaw Homes Group
Centrus devised a lender engagement plan and fronted negotiations with both bank and capital market lenders. By leading the discussions, Centrus deployed its extensive insights gained from past transactions, having arranged, or restructured over £6bn of bank debt for its housing clients in the past 24 months alone. This expertise ensured the complex financial negotiations were carefully navigated and that the resulting transaction not only met, but exceeded Jigsaw’s key objectives.
Transaction Outcome
The result of negotiation and strategic review between Jigsaw and Centrus was a significant transaction that included:
Increased RCFs totalling £103m with three lenders.
A new £50m private placement to support Jigsaw’s ambition to develop 4,000 new homes in the next five years.
Restructuring c.£700m of existing bank and private placement debt to better improve and harmonise covenants, thereby increasing capacity and reducing treasury risks.
All this was achieved while increasing the tenor of Jigsaw’s liquidity facilities and lowering their average interest margin and non-utilisation fees.
Throughout the process, which was supported by law firm Devonshires, Centrus maintained transparent communication, offering regular reporting to the Board to keep them informed and engaged. Additionally, Centrus provided comprehensive transaction execution support, ensuring an efficient and well-run process.
“Working with Jigsaw has been an exciting and rewarding project already. Our combination of innovation and experience allowed us to confidently meet – and surpass – Jigsaw’s objectives for its treasury operations, ensuring it could focus on what it does best; creating homes and building lives.”
“Jigsaw’s decision to appoint Centrus as its retained treasury advisor underscores our reputation as a trusted partner in the housing sector. The collaboration demonstrates Centrus’ expertise in navigating complex financial landscapes and delivering tangible results for our clients”.
John Tattersall, Managing Director – Centrus
“I’m proud to have supported and advised Jigsaw through this significant restructure and am extremely pleased with the outcomes we have achieved together. It has been rewarding to collaborate with Jigsaw on this journey to agree solutions, and to see these through to execution and implementation”
“We are looking forward to supporting Jigsaw in the future as they continue to deliver on their ambitious strategy, and this result sees them enter 2024 with strong liquidity and a diverse lender base to support their development goals”.
Tom Archer, Assistant Director – Centrus.
“As we continue with our plans to help tackle the current shortage of new affordable housing, this partnership approach helps us take another step forward in our commitment to deliver 4,000 homes over the next five years, as well as investing in projects and assets that increase life opportunities for our residents. We are ready to continue to develop our position from this strong footing.”
Paul Chisnell, Executive Director of Finance – Jigsaw Homes Group
Centrus advised firmus energy (“firmus” or the “Business”) in securing a new financing package to refinance existing debt and provide additional financing for their network expansion and energy transition strategy which includes the injection of locally produced biomethane into the gas grid.
The facilities totalling £285m included a £195m term loan, £75m capex facility and a £15m RCF.
Background
firmus, a core infrastructure asset, is one of three gas distribution operators in Northern Ireland. The Business is owned by funds managed by Equitix, a leading global investor, developer and long-term fund manager of core infrastructure.
firmus’s network is constructed from low maintenance polyethylene (PE) pipes, capable of transporting low carbon fuel alternatives including biomethane and hydrogen. The Business also operates a gas retail business (firmus energy supply), which is the largest gas supply business in Northern Ireland by consumption, providing essential energy solutions to a wide range of customers, including domestic, commercial, and industrial clients.
Centrus’ Role
Centrus were appointed as financial and hedging advisor to firmus in the refinancing of the company’s debt facilities.
The transaction leveraged Centrus’ understanding of the regulated utilities market to engage an appropriate pool of prospective lenders, which led to a to a highly competitive pricing package relative to the regulators allowance.
Credit Agricole Corporate and Investment Bank, DekaBank Deutsche Girozentrale, Ulster Bank Limited and Landesbank Hessen-Thuringen Girozentrale were appointed as arrangers, and National Westminister Bank Plc as agent and Security agent.
The refinancing process included a range of detailed workstreams, including:
Articulating the credit story and engagement with lenders
Complex structuring and valuation analysis
Full documentation negotiations
Hedge structuring
Added Value
firmus has achieved long-term financing at a highly competitive margin, which has helped increase profitability and optimise performance vs. the regulators cost of debt in the GD23 period.
Centrus competed the institutional market alongside the banking market in order to drive the right tenor and price.
“Centrus advised us through each stage of the refinancing. They became a seamless and valuable extension of our team through this process. Their analysis, and in depth understanding of the lenders in the market allowed us to achieve the optimal financing solution for our business. In addition their ability to communicate the options available to both the management team, shareholders and other stakeholders allowed firmus to optimise performance against the regulatory allowance for our GD23 debt raise. We are pleased with the outcome of this financing process and Centrus’s support and contribution throughout”
Denise Curran, FD – firmus Energy
“firmus energy, supported by funds managed by Equitix, has successfully completed the refinancing of its group debt facilities. These new debt facilities will continue to support the ongoing investment in the gas network and in energy customers across Northern Ireland, as the company delivers its’ GD23 price control business plan and supports the Northern Ireland energy transition with the injection of locally produced, renewable biomethane into the gas grid. We enjoyed working with Centrus, who did a good job of guiding us through the process and ensuring firmus obtained the financing package required to achieve our future growth plans””
Niall Martindale, CEO – firmus energy
“Centrus is delighted to have supported firmus energy and Equitix in structuring and arranging £285m of competitive new debt facilities. This funding package refinances existing debt facilities and provides additional financing for network expansion which will enable the continued rollout of natural gas and biomethane in Northern Ireland, a key cornerstone of the energy transition strategy.”
Established in 1888, Alliance Trust PLC (ATST) is one of the oldest and largest investment trusts in the UK, offering a diversified but highly active global equity portfolio at a competitive cost.
Committed to providing shareholders with the potential for long-term capital growth, the trust has demonstrated resilience by adapting to evolving market conditions over the years. Employing a diversified investment approach, Alliance Trust PLC seeks opportunities across various sectors and asset classes, aiming to optimize returns for its investors.
In Q2 2023, Centrus was engaged to undertake a review of ATST’s capital structure and sources of debt finance.
Centrus Solution
In the light of the review and recommendations made by Centrus, ATST’s board decided to:
Raise an additional £60m (equivalent) from the institutional debt market in order to provide the company with an element of medium term structural debt as part of its investment strategy.
Reduce its bank facilities from £250m to £100m.
The proceeds of the institutional debt were used to repay outstanding floating-rate bank borrowings, maintaining the Company’s drawn borrowings broadly unchanged.
By using the proceeds of the €70m private placement to repay existing bank debt, ATST’s weighted average borrowing cost was reduced from 4.7% pa to 3.8% pa, and the overall Weighted Average Life (WAL) of the debt portfolio has increased.
Outcome
Alliance Trust has a well diversified portfolio of assets with exposure to a wide range of markets, sectors and currencies. For a variety of reasons ATST’s board decided to borrow in EUR thereby accessing a lower coupon currency while hedging a modest element of its EUR asset exposure.
Alliance Trust has issued two tranches of privately placed Notes:
€20m maturing in December 2030 with a fixed coupon of 4.02%.
€50m maturing in December 2033 with a fixed coupon of 4.18%.
Centrus acted as the arranger of the Notes, advising on sizing, structuring the transaction, drafting an investor presentation, and arranging meetings with a selected group of institutional investors.
Separately, Centrus arranged new facilities with different maturities from two banks aggregating £100m.
“Having reviewed its capital structure and the composition of its debt facilities, ATST’s board decided to term out a portion of its bank debt, reduce the amount of its bank facilities to £100m and split these between two banks. Given the strength of Alliance Trust’s balance sheet and the high credit quality of the company, it was unsurprising that the institutional financing attracted significant demand from a range of investors. Ultimately one investor was chosen which offered the most attractive combination of maturity and coupon enabling Alliance Trust to lock in an element of strategic debt at levels which should be of long term benefit for the company and its shareholders”
Smith Square Partners Consortium acts as financial adviser to Ofgem on the £573 million completed transfer of Triton Knoll offshore wind farm transmission link from RWE Renewables to ETEPCO (a consortium of Equitix Limited and TEPCO Power Grid Incorporated)
On 01 December, 2023 Ofgem announced its confirmation to grant an Offshore transmission licence to ETEPCO (a consortium of Equitix Limited and TEPCO Power Grid Incorporated). This sees the transfer of the £573 million offshore transmission link from RWE Renewables, the developer of the Triton Knoll offshore wind farm, to London based Equitix Limited and TEPCO Power Grid, a Japanese utility company headquartered in Tokyo.
The Triton Knoll wind farm consists of 90 turbines, has a capacity of 857MW and is located 33km from the Lincolnshire coast in the North Sea.
The Smith Square Partners Consortium has been advising Ofgem in relation to sales of offshore wind farm transmission assets since 2020 when it was first appointed by Ofgem for Tender Round 7 and continues to advise on tender rounds up to and including Tender Round 10. Its advice has related to transmission assets for seven offshore wind farms with a projected generation capacity of 6.7 GW and combined asset values of c. £5.2 billion.
The Consortium comprises financial advisers Smith Square Partners and Centrus, with CEPA providing financial and related economic advice, tax advice provided by BDO and forensic cost reviews provided by Grant Thornton.
“Offshore windfarms are critical to the UK’s energy transition targets with a fivefold increase to 50GW target by 2030 with OFTO transactions playing a key part in the process. We are pleased to close this transaction with our consortium colleagues and player our part in contributing to the UK’s renewable energy and Net Zero targets.”
The Monks Investment Trust PLC (“Monks”) was founded in 1929 and has been managed by Baillie Gifford since 1931. Baillie Gifford is an unlimited liability partnership founded in 1908 and is solely focused on investment management. It is one of the largest investment Trust Managers in the UK.
On the 13th December 2023, Monks announced that it has issued a total of approximately £74 million equivalent of fixed rate, senior, unsecured privately placed notes, denominated in Euros and Japanese Yen, over periods ranging from 7 to 14 years.
Centrus Solution
Monks has issued four tranches of privately placed Notes:
EUR18 million with a fixed coupon of 4.30% to be repaid in 2030
EUR35 million with a fixed coupon of 4.29% to be repaid in 2033
EUR18 million with a fixed coupon of 4.55% to be repaid in 2035
JPY2,500 million with a fixed coupon of 2.17% to be repaid in 2037
Coupons are payable semi-annually.
Centrus acted as arranger of the issue of Notes, advising on the structure of the transaction, drafting an investor presentation and arranging meetings with a selected group of institutional investors.
Outcome
This transaction provides Monks with medium-term financing across a range of maturities and at a competitive weighted average interest rate of 3.96%.
The Monks’ Board remains committed to the strategic use of borrowings for the Company in order to enhance returns to shareholders over the long term and has set a guideline gearing level of 10%.
This new financing will serve to bring Monks’ level of gearing into line with the company’s target level, and to reduce the average cost of borrowing.
“Monks has a diversified portfolio with assets held across a range of sectors and industries and with exposure to several major currencies including USD, EUR, JPY and GBP. In order to benefit from lower coupon currencies, Monks decided to borrow predominantly in EUR but including a modest tranche in JPY with the financing provided by two investors offering attractive terms across a spread of medium term maturities”
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.”
The partnership results in Abri Group becoming a 50,000 home organisation – Centrus acted as sole corporate finance advisor to both entities. This role involved:
Merger treasury strategy formulation and execution, including business plan appraisal, capacity analysis, legal structure appraisal, consent cost analysis, liquidity and funding analysis, and credit rating strategy, feeding into the outline and full business cases.
Engaging 10 lenders including banks, bond aggregators and UK investors.
Providing insight and guidance throughout the lender consent process.
Assurance reporting (including to Joint Steering Group), project management and support to legal teams / other professional advisors.
Landscape and Outcomes
Centrus delivered the merger on time, whilst successfully gaining consents across a complex lender engagement landscape.
Focused negotiations minimised NPV cost of facility restructuring / refinancing; loss of value limited to 3 lenders whilst value gained with 2 lenders – net loss of value in legacy facilities equated to less than 5% of value at risk, substantially outperforming estimates.
Hedging restructuring across 3 lenders; realisation of in-the-money positions leading to final aggregate net income position whilst reducing ongoing interest costs.
Target financial covenants and definition harmonisation achieved with moderate exceptions, resulting in substantial increase in debt capacity and financial resilience.
Greater corporate freedoms around financial support and merger consents negotiated, including forward consent for Silva Homes to fully combine with Abri Group in future.
“The merger provides Abri with a strong platform to build new homes and invest in existing ones, creating a sustainable future for the thriving and inclusive communities we support.
Centrus provided expert advice and support during the analysis, negotiation and completion stages of our engagement with a diverse group of lenders. The impressive team at Centrus, led by Lawrence Gill and Paul Stevens, delivered on key targets within challenging timelines.
The Centrus team provided real commercial insight and helped us make key decisions on structure and terms, supporting through some relatively complex covenant negotiations and financial close pricing exercises. They were proactive and very responsive, and great to work with on this deal. We look forward to working with Centrus in the future.”
Caroline Moore, Chief Financial Officer – Abri Group
For more information, please contact Lawrence Gill, Director – Centrus
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you agree to our Privacy Policy
This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
Cookie
Duration
Description
cookielawinfo-checkbox-analytics
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
cookielawinfo-checkbox-functional
11 months
The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
cookielawinfo-checkbox-necessary
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
cookielawinfo-checkbox-others
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
cookielawinfo-checkbox-performance
11 months
This cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
viewed_cookie_policy
11 months
The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
