Pension Insurance Corporation (PIC) has expanded its lending activity in the UK’s social housing sector with an additional £30m (€35m) investment.

The specialist insurer of defined benefit pension schemes said it provided the capital by making a second private placement investment in secured debt issued by Heart of Medway Housing Association, part of the MHS Homes Group.

The latest deal is PIC’s fifth transaction involving £160m of lending, with MHS Homes as part of a long-standing partnership.

PIC made its first debt investment in MHS homes in 2016 in a £40m transaction to provide over 400 new properties, with a further two transactions totalling £50m in 2017 and 2021. In October last year, PIC made a further £40m investment in the UK social housing provider.

PIC said the latest will enable Heart of Medway to “access flexible, long-dated funding against the backdrop of a challenging macroeconomic environment” across the UK’s social housing sector.

Bruce Shelmerdine, group finance director at MHS Homes, said: “Over the last 10 years, Heart of Medway has grown from a fledgling housing association that built its first home in 2011, to a well-respected provider with a strong delivery record.

There’s a huge demand for affordable housing in Kent and this new private placement, a result of our long term relationship with PIC, will help us continue to meet the needs of our local communities.”

Celia Franch Lopez, debt origination manager at PIC, said: “We are delighted to have again invested in Heart of Medway. PIC continues to be an active lender to housing associations as investment in this sector generates social value while meeting our need for long-term, secured cashflows to match our liabilities.

“This allows us to fulfil our purpose to protect PIC’s policyholders’ payments over the long term, and benefits tenants who will live in the homes built as result of our long-term partnership with Heart of Medway.”

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