£275m funding deal for Trafford Housing Trust

25 January 2017

Trafford Housing Trust has struck a £275 million funding deal that will see £100 million available for joint ventures and 2,000 homes built over four years.

The mixed-maturity deal, arranged by Savills Financial Consultants, introduces a pool of funders, including institutional investors, and replaces the previous £145 million facility.

The 9,000-home Trust now has a simplified funding structure, with more flexibility to realise its business aims, such as the successful delivery of its 50/50 house building joint venture with L&Q.

Larry Gold, deputy chief executive and chief financial officer at Trafford Housing Trust, said: ‘Trafford Housing Trust is a financially strong group of companies and this deal demonstrates great confidence among funding institutions in the Trust’s governance, leadership and ambitious growth strategy.

‘The housing crisis means that in Greater Manchester alone supply of new homes is around 4,000 annually, compared with a projected need of over 11,000 a year for each of the next ten years.’

Helen Rourke, director of finance at THT, said: ‘The refinancing gives the Trust more control over our assets and greater potential to invest in our strategy to deliver better homes for residents, and significant numbers of new homes of all types across the North West.’

Terry Frain, director at Savills Financial Consultants, said: ‘We are delighted to have worked so closely with Trafford Housing Trust in delivering the refinance of its existing funding portfolio and substantially increase it with a mix of new funders.

‘This ground-breaking deal is delivered in partnership with banks as well as institutional investors, with deliberately diversified maturities ranging from five to 40 years.

‘Crucially, the Trust now has much greater flexibility and operational freedom at lower cost and the refinancing package delivers beyond all of the board’s initial objectives and ambitions.’

The £275 million deal was arranged by Savills Financial Consultants and involves Lloyds Bank, BlackRock, Pension Insurance Corporation and Yorkshire Building Society (see notes, below, for further details).

£100 million of the Trust’s new funding is available to be ‘on-lent’ to joint ventures or subsidiaries.

Jo-Ann Bonham, relationship director at Lloyds Bank Commercial Banking, said: ‘Greater Manchester is targeting to build almost 230,000 new houses over the next decade to help keep prices affordable and provide new homes for the increasing population.

‘Trafford Housing Trust is playing its part in reaching this goal with plans to deliver 2,000 new properties over the next five years. The new revolving credit facility agreed with Lloyds will support these proposals and is a clear statement of confidence in Trafford’s strategy and leadership team.’

Jonathan Stevens, head of European infrastructure debt, BlackRock, said: ‘This debt financing is a continuation of BlackRock’s investment in UK infrastructure and provides an excellent opportunity to invest in the social housing sector, which is an essential service and provides our clients with an inherently stable, long-term cash flow profile.’

Elizabeth Cain, debt origination analyst at Pension Insurance Corporation, said: ‘We are delighted to have been able to help fund Trafford Housing Trust’s development plans and provide them with a more flexible borrowing structure than the pre-existing financing.

‘We have ambitious plans to partner with housing associations in 2017 and beyond and look forward to further investments in the sector.’

The Trust’s joint venture with L&Q aims to build around 500 homes each year, with an £80 million investment from each partner over the four-year period to deliver 2,000 homes in Trafford and elsewhere in Greater Manchester.

Any profits generated from the joint venture will be re-invested back into the local area to create more homes for local people in the years ahead.

Ends

Notes to editors:

  • Lloyds Bank is providing a revolving credit facility of £100 million
  • Funds and accounts managed by direct and indirect subsidiaries of BlackRock, Inc are providing fixed-rate debt funding of £75 million
  • Pension Insurance Corporation is providing fixed-rate debt funding of £75 million
  • Yorkshire Building Society is providing a revolving, medium-term loan of £25 million
 
 

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