Pension Insurance Corporation made an £80m (€86.7m) debt investment in North Star Housing Group to help the North East of England housing association refinance existing bank facilities and develop new social and affordable homes.

The insurer of defined benefit pension funds said the funds are secured on a portfolio of social housing properties

North Star provides affordable housing, invests in its communities and develops new homes across the Tees Valley, North Yorkshire and County Durham. It currently owns and manages just under 4,000 homes.

PIC’s investment will help North Star complete a refinancing and restructuring exercise, as well as deliver 600 new social and affordable homes over the next eight years.

James Walder, executive director of finance and business support at North Star Housing Group, said: “The completion of the treasury and group restructure is an important milestone for North Star Housing Group.

“We have a clear strategy to both invest in our existing assets and develop new homes. Delivering on our treasury strategy in these highly uncertain times has been a real achievement for North Star Housing Group and we look forward to delivering our ambitious plans for the future.”

Eugenia Korobova, debt origination manager at PIC, said: “PIC’s funding in North Star, allowing it to develop hundreds of new homes, and in the housing association sector more generally, plays an important part in backing the pensions of our policyholders as we look for secure and reliable income streams over the long-term.

“The pension risk transfer market is expected to play an increasingly important role funding social housing over the coming decade as we take on more pension liabilities.”

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