LNT Group agrees £51m funding deal with Legal & General
YORKSHIRE-BASED LNT Group has agreed a £51m debt facility with Legal & General to fund the development of new care homes.
LNT Group, which has its headquarters in Leeds and is the parent company to Ideal Carehomes, which operates 36 homes across the UK, has secured the 10-year debt facility to refinance its existing bank debt and it will release capital to support the company’s plans to to build between six and eight new are homes a year.
The group said the developments will create around 500 jobs a year and the loan is secured against a portfolio of mature care homes, providing strong cashflow cover and asset protection, and is believed to be the first time that tailored bilateral institutional debt finance has been provided to the care home sector.
Ideal Carehomes currently operates 36 homes across the UK, working closely alongside local authority partners. Whilst the LNT Group boasts more than 25 years’ experience in designing, developing and operating residential homes for the elderly, the entire portfolio has been developed since 2009. Varying between 41 and 64 beds, all of its schemes are purpose-built.
The deal forms part of L&G’s larger UK housing and infrastructure investment strategy. One of the six UK insurers committed to investing £25bn in the UK by 2018, as a long-term provider of investment capital it has invested more than £5.5bn in UK infrastructure projects to date, including affordable housing, residential regeneration and student accommodation.
Laura Mason, director of direct investments at Legal & General Capital, said: “L&G is a natural provider of longer term financing given our long term annuity liabilities. We are therefore extremely pleased to have been able to work with the LNT Group, providing the stable financing that clearly benefits a sector such as this and which traditional markets are now less likely to be able to provide.”
Lawrence Tomlinson, chairman of the LNT Group, commented: “Having taken time to gather a strong understanding of our business model and develop a partnership for the future, we are confident that L&G share the LNT Group’s long term vision and ambitions. We were particularly impressed with L&G’s knowledge of the sector and ability to structure terms that are tailored to our maturing business. Supporting our future growth, the long term facility not only gives the LNT Group stability but also releases necessary capital to underpin development opportunities and job creation. It is wonderful to see L&G expanding in this market and supporting British business in this vital sector. We are really looking forward to developing the relationship further.”
Alex Gipson, lending manager at Legal & General, added: “With a high quality portfolio of care homes running at strong occupancy levels and providing affordable prices for all, the LNT Group has a maturing yet proven business model that we believe responds to the long term care needs of the UK. At a time when development of new homes is struggling to keep pace with both demographics and increasing quality requirements quite rightly being demanded by residents and their families, we are delighted to play a role supporting LNT’s much needed continued investment.”
