Bromford and Legal & General Investment Management's (LGIM) private credit division have agreed a £50 mln (€58 mln) funding partnership for the UK’s social housing sector.
The partnership aims to deliver over 12,000 new energy efficient and affordable homes by 2031 in the West Midlands and West of England.
In a first for the social housing sector, the funding has been delivered through re-couponing Bromford's existing £100 mln (€117 mln) private placement with LGIM, originally agreed in 2020.
Over the past three years, 3,400 new affordable homes have been developed, while energy efficiency improvements on existing homes were made, with 87% of homes now at EPC C or above.
Supported by Newbridge Advisers, the re-couponing releases £50 mln to be used as immediate cash proceeds and it will be repaid over 40 years.
Imran Mubeen, director of treasury, Bromford said: ‘In an elevated rate economy with limited market activity, we are facing into new challenges and we must rise to meet them with innovative thinking to deliver fresh solutions. Working with LGIM to retrofit our legacy private placement created a more agile pathway to new funding without the full weight of new legal documents, a full security charging cycle or an extended roadshow. The transaction immediately strengthens our liquidity and will be complimented by further funding for later this year. We still have over 8,000 households on local authority waiting lists across our core geographies, and the delivery of new energy efficient homes is a core component of our framework and new corporate strategy with its focus on scale, place and impact.’
Steven Bolton, head of corporate private credit, LGIM Real Assets added: ‘This funding demonstrates how we can work collectively to invest in the UK’s towns and cities and deliver new, much needed social and affordable homes. This investment supports our clients’ long-term pension commitments and helps provide for housing, jobs and increased economic activity.’
The new funding represents Bromford's first proceeds under its updated 2023 Sustainable Finance Framework, which was published in June and aims to cut carbon emissions to under three tonnes per home.
After constructing a record 1,265 new houses in 2017, Bromford has recently obtained planning permission for its largest land-led initiatives to date, 180 and 100 dwellings at two sites in Gloucestershire, respectively.
By 2035, the Midlands-based social housing association hopes to have 25% of its pipeline of new homes in large-scale brand-new communities.
