Aviva Investors has entered into a £60m (€65.3m) private corporate debt facility with Coastal Housing Group, a UK not-for-profit housing association, on behalf of the Aviva UK Life annuity business.
The 30-year debt facility is part of an ongoing strategy by Aviva Investors to target long-dated, illiquid secured investments.
Coastal, which has 6,000 homes under management across South Wales, will use proceeds from the largest financing it has ever entered into to expand its operations.
Aviva Investors said UK housing associations have displayed ”consistent demand for properties in recent years, along with healthy operating margins and stable revenue streams”.
Munawer Shafi, head of structured and private debt at Aviva Investors, said: “This transaction demonstrates our ability to structure bespoke funding solutions, aligned to counterparty businesses and investors’ needs.
“The counter-cyclical nature of social housing, coupled with high relative value and a strong regulatory underpinning, make it an attractive sector in the current environment.
“This deal fits well with our strategy of investing in long-dated, predictable cash flows, which aim to offer attractive risk-adjusted returns to our investors.”
Ashish Dafria, CIO at Aviva UK Life, said: “As a business with a significant focus on ESG, we are particularly keen to pair our investment needs with projects that demonstrate social and environmental benefits.
“The social housing sector has become increasingly attractive to investors such as Aviva, where certainty of cash flows to meet liabilities is of paramount importance, while also recognising the increased need for affordable homes provision in local communities.
“Coastal has a strong track record in regeneration work and we are pleased to be providing financing to the business.”