Pension Insurance Corporation (PIC) has invested £40m (€45.5m) in Halton Housing, a regulated UK housing association.

The specialist insurer of defined benefit pension funds said it invested the funds in long-dated, senior secured debt issued by Halton.

Halton, which has 7,000 properties in the Cheshire towns of Runcorn and Widnes, will use the funds to finance its plans to deliver more affordable housing, as well as to repay maturing debt.

The funds will be made available at an agreed future date to match Halton’s needs and save on interest payments.

Neil McGrath, the executive director of business services, at Halton said: “We are very pleased to have entered into this funding agreement with PIC, which will allow us to build additional social housing in an area where demand is high. 

 “The deferred characteristic allows us to lock in certainty of funds at attractive interest rates well ahead of when the funds need to be utilised, resulting in cost of carry savings.”

As a result, Halton can continue to support the local population of Runcorn and Widnes with its affordable housing, McGrath said.

Marno Jooste, the debt origination manager at PIC, said: “We are delighted to have come to an agreement with Halton on this competitive transaction.

“The maturity profile and deferred drawdown structure is well-suited to our liabilities and represents an attractive investment.” 

In total PIC has invested £1bn in social and affordable housing across the UK.