£50m funding deal set to deliver 12,000 homes

Gloucestershire scheme. Credit: Bromford

A strategic collaboration has been forged between Bromford and Legal & General Investment Management’s (LGIM) Private Credit division, resulting in a £50m funding deal.

The partnership is looking to deliver more than 12,000 energy-efficient and affordable homes in the West Midlands and West of England by 2031 to try and meet the demand for social housing. Bromford says there are 8,000 households on local authority waiting lists across its core locations.

Funding has been delivered through re-couponing Bromford’s existing £100m private placement with LGIM, which was originally agreed in 2020 – a move which Bromford says is the first of its kind for the social housing sector.

During this period, 3,400 new affordable homes have been developed as well as energy efficiency improvements being made on its existing homes, with 87% of homes now at EPC C or above.

The re-couponing, which was supported by Newbridge Advisers LLP, releases £50m to be used as immediate cash proceeds and it will be repaid over 40 years as an amortising repayment.

Steven Bolton, head of corporate private credit, LGIM Real Assets said: “This funding demonstrates how we can work collectively to invest in the UK’s towns and cities and deliver new, much needed social and affordable homes.

“This investment supports our clients’ long-term pension commitments and helps provide for housing, jobs and increased economic activity. As a leading organisation in the sector we’re pleased to strengthen our existing partnership with Bromford and help deliver an innovative funding solution for them.”

Funds will also help Bromford’s initiative to become more sustainable by coaching customers into employment or training, employing more graduates and apprentices, and seeking to reduce carbon emissions to under three tonnes per home.

The news comes as the developer built 1,265 new homes last year and in recent months has secured planning permission for its biggest land-led developments to date, for 180 and 100 homes respectively at two sites in Gloucestershire.

Bromford’s director of treasury Imran Mubeen said: “In an elevated rate economy with limited market activity, we are facing into new challenges and we must rise to meet them with innovative thinking to deliver fresh solutions. Working with LGIM to retrofit our legacy private placement created a more agile pathway to new funding without the full weight of new legal documents, a full security charging cycle or an extended roadshow.

“We hope it will set a further precedent for our sector and sit alongside conventional routes to new funding so housing associations have a full menu of options from which to select, as we optimise our funding strategies in a challenging economic climate. The transaction immediately strengthens our liquidity and will be complimented by further funding for later this year”.

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