The BAE Systems pension funds are providing a £35m (€42bn) loan facility for UK retirement housing after arranging a similar deal for affordable housing earlier this year.
The private placement has been agreed with the ExtraCare Charitable Trust, a Coventry-based charity that operates 4,020 mixed-tenure homes in 31 retirement villages and schemes.
The funding, at a fixed rate of interest, will last for 15 years.
The facility was agreed by BAE Systems Pension Funds Investment Management (BAPFIM), which manages three defined benefit schemes for the corporate plans’ trustees.
Of BAPFIM’s £16bn in assets under management, £7bn is invested in fixed income assets.
Among other sectors, BAPFIM has provided funding for local authorities, social landlords, higher-education institutions and other not-for-profit organisations.
The additional funding will build on the recently announced £150m Lloyds Bank re-financing for ExtraCare.
It partly repays the Lloyds facility, while increasing total funding to £155m.
The latest funding package will support the trust’s three-year growth plan, which will include an additional retirement village in Longbridge to add to the four villages already opened in Birmingham and an additional village planned in neighbouring Solihull.
It also plans to extend its geographical footprint, opening schemes in South Gloucestershire, Bedford and High Wycombe, meeting the increased demand for retirement facilities in line with the growing ageing population.
Last April, BAPFIM agreed a £35m facility with Rentplus, the UK affordable housing provider.
David Cryer, senior portfolio manager at BAPFIM, said the funding reflected its commitment to the housing and not-for-profit sectors and provided a long-term income stream to match pension liabilities.
