Sovereign Housing Association and Network Homes merge to form SNG

Centrus’ Role

Sovereign Housing Association and Network Homes have merged to form Sovereign Network Group.

Centrus acted as the sole corporate finance advisor on the merger. This role involved: 

• Merger treasury strategy formulation and execution, including business plan appraisal, capacity analysis, legal structure appraisal, consent cost analysis, credit rating strategy, feeding into the outline and full business cases. 
• Engaging 34 lenders including banks, US & UK investors and local authorities.
• Providing insight and guidance throughout the lender consent process.  
• Assurance reporting (including to Joint Board), project management and support to legal teams / other professional advise.

Landscape and Outcome

• Centrus delivered the merger on time, whilst successfully gaining consents across a complex lender engagement landscape.
• Determined negotiations minimised NPV cost of facility repricing/restructuring, limited to 3 lenders. Loss of value in legacy facilities outperformed estimates, equating to less than 20% of value at risk. Only 1 hedging restructure. 
• Target financial covenants and definition harmonisation were achieved with moderate exceptions, resulting in a very substantial increase in debt capacity.
• Much greater corporate freedoms were negotiated around financial support and future merger consents. This includes forward consents to enable Network Homes to fully combine with Sovereign in future.

“Centrus provided skilful support during the analysis, negotiation and completion stages of our engagement with a very diverse group of funders. The impressive team at Centrus, led by Lawrence Gill and Paul Stevens, were focused on achieving the challenging targets set by both organisations within very aspirational timelines, making productive use of their extensive relationships with funders. 

We look forward to working with Centrus in the future.”

Peter Benz, Chief Financial Officer, SNG 

For more information, please contact Paul Stevens, Director at Centrus

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