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Centrus advises on a £650m Sustainability Linked RCF for HICL Infrastructure PLC

Transaction Overview

Source: HICL Infrastructure Partners

HICL is a FTSE 250 London-listed UK investment company that seeks to offer investors stable, sustainable long-term returns from investments in core infrastructure. 

HICL has successfully renegotiated its revolving credit facility (“RCF”), used to support the acquisition of new investments. 

The new RCF is a £650m multi-currency facility that runs to 30 June 2026, with options to extend for up to two additional years. The RCF remains on the same margin of 165bps over SONIA. 

Centrus’ Role

Centrus acted as financial advisor to HICL, a role which included: 

  • Converting an accordion commitment to a term commitment, agreeing on allocations with all funders commercial negotiation of revised documentation. 
  • Coordination of the process towards a successful close in an efficient and timely manner. 

Outcome

The facility’s consortium of lenders includes Barclays, CIBC, ING, Lloyds, National Australia Bank, Royal Bank of Canada, Royal Bank of Scotland International and Sumitomo Mitsui Banking Corporation.

The RCF is a sustainability linked loan, incorporating defined sustainability targets where HICL incurs a premium or reduction to the interest charged on the RCF based on performance against Environmental, Social and Governance KPIs. 

Performance against these targets will be measured annually, with the cost of the RCF adjusted for the following year. Overall, the margin on the RCF can vary between 162bps and 168bps over SONIA.

“We are very pleased to have worked with Centrus to renegotiate our sustainability linked RCF. Their expert market knowledge and collaborative approach really helped us to achieve our funding objectives in what has been a very volatile economic environment” 

Helen Price, Chief Financial Officer – HICL PLC

“HICL has not only achieved a successful refinance, but has obtained a longer term commitment from its funders. This is a testament to the strength of the business, and the strong relationship it has with lending partners”

Mark Taheny, Senior Director – Centrus

For more information, please contact Mark Taheny, Senior Director at Centrus.

Centrus advises Portsmouth Water on £325m investment for first UK reservoir in 30 years

Transaction Overview 

Portsmouth Water has secured £325 million in investments to construct the first major new reservoir in the UK since the 1980s. 

Havant Thicket Reservoir is an environmentally led project that will play a key role in protecting internationally-rare chalk rivers, by providing additional water supplies and resilience to the South of England. As well as supplying a vital new source of water in the face of climate change and a rapidly growing population, the reservoir will offer a new green leisure facility for the local area. This will include a wetland, visitor centre and network of footpaths, cycle routes and bridleways.

Centrus’ Role

  • Centrus undertook a holistic capital structure review and supported Portsmouth Water in designing a financing plan to create a robust capital structure throughout the construction of the Havant Thicket Reservoir​. This included securing assurance regarding the likely impact of the financing plan on credit ratings.  
  • Centrus supported the business through a procurement process to secure competitively priced and structured capital to fully finance the investment; and 
  • Our team managed a consent process with creditors to ensure that the terms of the financing platform were adapted to cater for the structure of the regulatory support received from OFWAT, the company’s economic regulator.

Outcome 

The banks giving their support to the environmentally driven scheme include existing lenders ING, Lloyds, Nat West, and Siemens Bank. Portsmouth Water has also secured a £50m commitment from the UK Infrastructure Bank, in the first investment of its kind for the sector, and is issuing a new £75m CPI-linked bond guaranteed by Assured Guaranty and purchased by abrdn and Pension Insurance Corporation. This is in addition to the equity commitment of £150m that has been secured from shareholders and was announced last month.

More information about Havant Thicket Reservoir can be found here: https://havant-thicket-reservoir.uk.engagementhq.com/ 

“We are delighted to have secured the £325 million investment required to construct Havant Thicket Reservoir. This will be the first large scale water storage reservoir to be built in the UK since the 1980s. 

It will play a key role in protecting internationally important chalk rivers – the River Test and the River Itchen, by securing a new, sustainable source of water for the region. This is an exciting time for the project. We have recently taken a major step forward in awarding the main reservoir works contract and, with all capital and investment now secured, look forward to work progressing on site.” 

Bob Taylor, Chief Executive Officer – Portsmouth Water

“As a B Corporation, Centrus is passionate about delivering solutions for a sustainable future. We are pleased to have supported Portsmouth Water in securing funding for Havant Thicket Reservoir which will have a positive impact on both the local environment and community, embodying our ethos of ‘Finance with Purpose’” .

Geoff Knight, Managing Director – Centrus

For more information, please contact Geoff Knight, Managing Director at Centrus

Centrus arranges £70m private placement for University of Derby

Transaction Overview

 The University of Derby is an award-winning university, committed to delivering economic, social, and cultural prosperity to its 23,000 students. 

Following a competitive funding process, a £70m private placement was secured, featuring highly attractive, fixed rate, 35-year, terms. It is the University’s first debt capital markets issuance and was arranged by Centrus, who acted as corporate finance advisor.

The issuance will fund a new state of the art business school, a core part of the University’s long-term strategy. 

Structured with a 12-month deferred tranche, allowed the funding to match the project programme. Further, the funding incentivises the University’s commitment to social inclusion and equality. It does so by providing a discount if the target set by the University for reducing the attainment gap is achieved. 

“The new Business School is pivotal to our role as a civic university and the development of our city campus, enhancing the teaching and real-world learning experience for our students and staff.

Centrus, and Mills & Reeve, provided outstanding support through the process, contributing to the successful outcome achieved. We are delighted our new borrowing arrangements link to our inclusion and equality commitments, given these commitments to the University’s strategic agenda.” 

Craig Jones, Chief Financial and Commercial Officer – University of Derby

“It’s been a pleasure to have supported the University arrange funding so key to their long term-strategy. This excellent outcome was achieved against the backdrop of significantly volatile financial markets. A key element of the success obtained was a carefully targeted investor and credit positioning strategy, on which we worked closely with the University to develop and implement.

We see this transaction as part of a broader trend towards universities utilising debt financing for capital projects across the sector.” 

Phil Jenkins, Managing Director – Centrus

“We are delighted to have supported the University on its private placement. It was a pleasure to work with the University at every step in the transaction, providing help and advice throughout. It was also rewarding to work on a project that will have such a positive impact on the University, its students and staff, as well as the wider community in Derby.” 

Matthew Howling, Principal Associate – Mills & Reeve

Centrus arranges £50m Sustainability Linked RCF for University of London

Transaction Overview

University of London (“UoL”), is the UK’s leading provider of digital and blended distance education internationally, with 45,000 students in 190 countries.

UoL is also a federation of 17 esteemed higher education institutions, with more than 240,000 learners; collaboration is at the heart of its ethos.

Centrus supported UoL in arranging a new £50m sustainability linked 5 year revolving credit facility (RCF) with Lloyds, featuring flexible covenants and enhancing the University’s liquidity and credit risk profile.

Centrus Solution

Centrus, as corporate finance advisor to UoL, worked closely with the University through engaging with and obtaining terms from lenders to the HE sector. 

This included preparation of comprehensive materials to position the University’s credit and operating strengths. Centrus utilised its market insights to enable strong terms to be negotiated from a range of potential lenders.

A report was prepared for Committee evidencing Lloyds offer as providing the most flexible and cost effective solution, best achieving the funding objectives, while also aligning with UoL’s commitment to ESG.

Outcome

  • £50m RCF arranged, enhancing UoL’s liquidity position with flexible covenants which provide greater freedom to enable future ambitions.
  • The funding is sustainability linked (“ESG”), a new innovation for the sector, enabling UoL’s ongoing commitment to sustainability to be aligned with funding.
  • Through achieving set ESG KPIs, the University benefits from reduced funding costs, with cost savings able to directly support UoL’s students, stakeholders and broader ESG commitments.

“Centrus’ support has been invaluable, driving the best terms possible for UoL, providing assurance throughout the process, guiding us in a challenging market environment and helping us achieve this great outcome”

Rita Akushie, Pro Vice-Chancellor Finance & Operations – University of London

“We are delighted to have supported the University in arranging this facility. The new RCF further enhances UoL’s robust position, while aligning its sector leading ESG activities with the funding provided”

Sam Goldman, Director – Centrus

For more information, please contact Sam Goldman, Director at Centrus.

Centrus advises mhs on £180m bank funding and £90m in new capital markets

Transaction Overview

mhs Homes Group (“mhs”), provides over 9,500 homes in the Thames Estuary region, and is the largest independent social landlord in the UK. 

With ambitions to develop 600 new homes over the next 5 years, its mission is to help end the housing crisis in North Kent by providing safe and sustainable homes.

The transactions involved 2 new private placements for £90m, restructuring the £180m bank portfolio including £40m in new RCF funding 

Centrus Solution

  • Supported mhs from formulation of strategy, to engagement with a broad range of funders, to execution of the multiple financing transactions.
  • Given volatile market conditions, Centrus ran dual track PP and bank processes and were involved in engaging a wide range of banks and investors, employing a dynamic approach to provide clarity of the most attractive solutions, and agility to adapt if conditions changed.
  • Strong focus on project management ensured the multiple funding elements were handled efficiently while providing assurance to mhs executive and board.

Outcome

  • £90m of private placements from Legal & General Investment Management and PIC, achieving long dated fixed rate funding, extending portfolio tenor, reducing long term rate and refinancing risk
  • Restructured funding of  over £140m, providing more flexible covenants and less restrictive controls to support future development and net zero investment
  • Further £40m in new liquidity funding to further enhance resilience 
  • Ensured optimal outcome achieved, balancing cost, risk management and flexibility to drive demonstrable VfM

“Centrus’ support has been invaluable throughout the process, with ongoing assurance and advice. This has allowed us to manage the challenging market environment and achieve  these great outcomes”.

Bruce Shelmerdine, Finance Director, mhs homes group

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

Centrus arranges £100m funding for Caredig

Transaction Overview

Caredig manages around 3,000 homes in South West Wales, with a strong reputation and track record for making a positive difference in its local community.

The Housing Association has undertaken a series of transactions to transform its treasury portfolio. This includes arranging a new 25-year £26m fixed rate facility from Principality to refinance existing shorter dated and more restrictive debt. A new £20m RCF has also been arranged with Santander.

A further c£50m of existing funding has been restructured, with more flexible covenants and controls.

Centrus Solution

As treasury and funding advisor, Centrus worked closely with Caredig to develop strategy and prepare materials to position its credit strengths to funders.

Centrus led negotiations across the transactions and guided Caredig through running a multi-funder process (covering all bank and capital markets options), in seeking the long dated finance.

This dynamic process allowed for agility, right up to the point of pricing enabling Caredig to optimise the outcomes.

Outcome

  • The new funding strongly enhances Caredig’s treasury position, significantly reducing long term refinancing and interest rate risk.
  • Further, the funding arrangements provide additional capacity for Caredig to invest in existing properties (including for de-carbonisation), as well as increase its development programme for new homes.
  • These transactions build strongly upon the significant financing restructure undertaken in 2020, ensuring the treasury platform is robust but sufficiently flexible to adapt to future needs.

“Centrus has supported us every step of the way, providing invaluable and tailored advice and assurance, with a flexible and dynamic approach. This approach ensured we achieved the best outcomes possible in a very challenging environment”

Cerys Gregory, Director of Finance – Caredig

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

Centrus advises Gentoo on £460m restructure of its treasury portfolio

Transaction Overview

Gentoo is a leading provider of social housing with over 29,000 properties.  They provide more than 60,000 people in Sunderland with a place they can call home.

Gentoo has had a long-standing ambition to remove the significant legacy complexity from its funding portfolio. This transaction now realises that aim.

The transaction sees £360m of legacy, AMRO, and HSBC. partly syndicated debt refinanced by a 40 year £110m private placement and £350m in bank facilities provided by NatWest, ABN  

Centrus Solution

  • Centrus supported the development of Gentoo’s treasury strategy, which was refined in response to 2022’s market turbulence to ensure best outcome was achieved.
  • We led a competitive bank process to raise £150m in new RCFs, alongside leading negotiation with existing banks.
  • Simultaneously, Centrus advised and arranged the £110m private placement – the fundraise was oversubscribed, leading to a tightly priced issuance.
  • We worked closely with Gentoo and the broader range of 12 financial stakeholders to deliver this successful outcome.

Added Benefits

The new facilities feature more favourable financial covenants and controls, are materially more security efficient, and enable delivery of Gentoo’s development and stock investment programmes. 

In addition, the harmonised facilities have helped to recalibrate covenant requirements and reporting obligations – leading to greater administrative ease for the business going forward, 

The restructure has seen Gentoo achieve an A+ rating with Fitch.

“The restructure of our treasury portfolio will further enable Gentoo to deliver our core purpose of providing safe, decent homes for our tenants and continue to play our part in the ongoing regeneration of the City of Sunderland.”

Louise Bassett, Interim Chief Executive – Gentoo

“We are delighted to have completed this complex project in what has been a challenging financial environment. The benefits of increased liquidity, modernised security arrangements and revamped covenants and corporate freedoms combine to increase Gentoo’s ability to deliver its corporate strategy. This extensive restructure of our treasury portfolio strengthens Gentoo’s platform to deliver an ambitious programme of investment in its existing homes and in new affordable homes to meet the needs of the people of Sunderland”. 

Peter Lenehan, Executive Director of Finance – Gentoo

“Gentoo has had a long-standing ambition to remove the significant legacy complexity from its funding portfolio. This transaction now realises that aim.

The transaction, which began in a stable interest rate environment, has had to navigate the challenges that 2022 brought with it. Through our close working relationship with Gentoo and the broader range of 12 financial stakeholders involved in the transaction a successful outcome has been achieved.

The restructure provides multiple benefits, including bolstered liquidity, reduced covenant risk, improved security efficiency, and an enhanced fixed floating ratio whilst retaining flexibility – all of which will support the organisation to continue investing in homes in the Sunderland region.”

John Tattersall, Senior Director – Centrus

“The deal marks the culmination of many months of planning, negotiating and implementing a bold treasury strategy against the backdrop of a variable economic environment. We’re delighted to have played our part in helping Gentoo achieve its goals and provide a robust platform on which to carry out the next exciting chapter in its evolution.”

Gary Grigor, Partner – Devonshires

For more information, please contact John Tattersall, Senior Director – Centrus

Centrus arranges £150m bank refinancing & £100m private placement for Silva

Transaction Overview

  • Silva Homes (“Silva”), owns & manages over 7,000 homes, focused on the region around Bracknell Forest. Silva is rated A+ by S&P
  • Silva has an ambitious programme to develop 1,100 new homes over the next 5 years.
  • Refinanced existing lender with 3 new facilities, totalling £150m, with maturities ranging from 5 to 15 years.
  • Silva also raised £100m 35 year private placement, including £25m 12m deferred, £25m 24m deferred.

Centrus Solution

Centrus worked closely with Silva from the formulation of refinancing & new funding strategy, to executing of new bank & PP funding.

Our team ran a multi bank and investor process allowing for wide engagement, ensuring Silva received indications from a large number of market participants and that value for money and optimal terms were received.

Centrus provided Silva with broad project management and governance support, ensuring assurance throughout the process and that outcomes achieved aligned with overarching treasury objectives.

Outcome 

  • New £150m of bank facilities from 3 lenders, more flexible financial covenants than existing, supporting long term funding, liquidity, ESG and development ambitions.
  • £100m private placement funding, for 35 years, providing long dated, low cost fixed rate funding, extending portfolio tenor, multiple deferred tranches allowing for funding to be received as and when required.
  • Overall portfolio risk reduced, tenor extended, refinancings staged over time, long term interest risk reduced, significant increase in liquidity.

“Centrus has provided high quality support in arranging these deals. Their understanding of the market, strategic guidance and project support, has been key in helping us achieve such a strong outcome and position us for the future.”

John Andrew, Finance Director – Silva Homes

“Proud to have supported Silva on these new transactions. The new funding provides a robust foundation for Silva to achieve future ambitions. Given economic headwinds & market volatility, this is a significant achievement for Silva”

Sam Goldman, Director – Centrus

For more information, please contact Sam Goldman, Director – Centrus

Centrus arranges funding for DBE Energy anaerobic digestion plant 

Overview

Centrus acted as financial advisor to the management team and key shareholder of DBE Energy Limited, an anaerobic digestion (AD) plant in Surrey, England. Centrus supported them in securing investment from a fund managed by the Sustainable Private Infrastructure team of Lazard Asset Management. This transaction represents the fund’s inaugural investment in the UK market.

DBE Energy’s state-of-the-art AD plant began receiving local food waste in January 2020 and has the capacity to process 25,000 tonnes of food waste each year to produce up to 2.3 million cubic metres of clean, green, renewable biomethane, providing energy for around 700 average sized family homes per year. 

Centrus’s role was to support DBE Energy’s shareholders in securing the right financial partner to support the next phase of their growth as the management aims to diversify revenue lines through carbon capture for the local food and beverage industry, as well as potentially consolidating the food-waste AD sector.   

Our services included: 

  • Developing the business plan and financial model in collaboration with the management team.
  • Identifying the right shareholder to pursue DBE Energy’s growth plans from a broad range of financial and strategic investors and negotiating commercial terms supporting DBE Energy shareholders.

Centrus value add: 

  • A range and depth of relationships with equity investors active across the UK and Europe.
  • Expert modelling capabilities and the ability to create a management presentation that best articulates the business plan.
  • Experience in structuring complex equity and debt financings in a broad range of sectors for businesses in various stages of growth. 

“Centrus supported throughout, actively managing the process from start to finish. The team used their specific sector knowledge and expertise in structuring complex financings to run a sale process. We are delighted with the outcome and look forward to the future in partnership with Lazard Investment Management.” 

Steve Sharratt, CEO of DBE Energy Ltd

“The AD market in the U.K., despite being one of the most advanced in Europe, is fragmented and thus creates significant potential for consolidation and growth. We are delighted to have completed this investment in DBE Energy, and together with its management team are looking forward to growing this partnership further.”

Robert Wall, Head of Sustainable Private Infrastructure – Lazard Asset Management

“It has been a pleasure working with the management and key shareholders of DBE Energy to secure a partner that will drive the future growth of the business. We look forward to continuing to work with the team and new shareholders as they grow their partnership. 

The UK anaerobic digestion market continues to be an exciting growth market and will play a significant role in enabling the UK to meet its net zero targets. Centrus has a deep understanding of the UK and European green gas space and are well versed in helping our clients meet their strategic objectives”

Terence Amako, Head of M&A and New Energies – Centrus 

For more information, please contact Terence.Amako@centrusadvisors.com