Housing association secures £100m funding deal with NatWest
Lisa Martin, director of resources at bdht
West Midlands housing association bdht has agreed a £100m funding deal with NatWest to support its investment in existing and new homes.
As well as helping bdht build additional affordable homes in and around Bromsgrove, the funding supports bdht’s programme of energy improvements to existing homes, so residents’ energy bills are kept to a minimum.
bdht also secured £4.9m in the recent third round of the Warm Homes: Social Housing Fund. The new funding deal with NatWest ensures bdht can match-fund this amount and deliver on its commitment to improve the energy efficiency of all its homes to at least EPC level C by 2030.
The 4,400-home housing association will use the funds agreed with NatWest to refinance existing debt as well as adding additional finance to be able to invest in affordable home provision. The previous debt was a mixture of short and long-term fixed tenures. One aim of the process was to introduce a more balanced debt profile across the short, medium and long terms.
The £100m consists of a £40m fixed-term, loan-linked ISDA that is split into three tranches with tenures of 10-15 years. A loan-linked ISDA is a financial instrument to help manage interest rate risk. There are also two Revolving Credit Facilities (RCFs) of £40m over 7 years and £20m over 10 years.
bdht has negotiated more flexible covenants on the £100m. The new loan agreement covenants give bdht greater flexibility for the planned maintenance programme as these costs are now excluded from the covenants.
Lisa Martin, director of resources at bdht said: “We are very pleased to have arranged this new funding deal with NatWest and are grateful to the team there for all their support. It is particularly important to us to have maximised our financial capacity, allowing us to invest in improving existing homes so that energy bills for our tenants are kept to a minimum.
“This funding also means we are well on the way to meeting our aim of building new affordable homes to help tackle the housing crisis in and around Bromsgrove.”
Dharmesh Patel, associate director housing finance, real estate finance at NatWest said: “We are pleased to support bdht with funding which enables the housing association to continue investing in its housing portfolio and develop new affordable housing for communities across the West Midlands.”
Lender: NatWest
bdht treasury adviser: 2Tix
bdht legal adviser: Trowers & Hamlins
Lender security valuation: JLL
