Pension Insurance Corporation (PIC), a defined benefit pension fund insurer, has invested £93m (€107m) in secured debt issued by a housing partnership supported by the Welsh government.
The debt matures in 2033, which PIC said matches its cash flows; £10m of the loan has been deferred for four years.
The Welsh Housing Partnership, which issued the debt, was set up as an initiative to deliver new affordable housing for four housing associations. It was launched in 2011, and owns nearly 1,000 homes acquired over five phases of investment.
Ian Williams, chair of Welsh Housing Partnership, said: “The Welsh Housing Partnership is an innovative solution to providing much needed housing across Wales. We are delighted to work with PIC on this funding package and appreciate their willingness to provide long-term funding for something which is not traditional social housing.”
PIC has already invested more than £600m in social housing around the UK. Earlier this year it announced that it had invested in secured debt issued by a housing association in Greater Manchester and in a UK student-housing project.
Commenting on the Welsh Housing Partnership deal, Allen Twyning, head of debt origination at PIC, said it has already invested “a considerable amount” in some of the main housing associations and intends to invest “much more”.
Centrus Advisors advised the Welsh Housing Partnership on the transaction.
The Welsh government has a target of 20,000 affordable homes during this term of government.