Port of Leith Housing Association (PoLHA) has secured a new £35m private funding facility to support its plans to build over 480 homes for social and mid-market rent in Leith and North Edinburgh by 2020.
The deal, which is one of the first of its kind, combines a revolving credit facility (RCF) and a private placement (PP) finance deal that has been arranged by Bank of Scotland. The Association has been supported through the successful completion of this by Capita (as treasury advisors) and Harper Macleod (as legal advisor).
An initial £10m revolving credit facility with Bank of Scotland will be paid down in stages and will run until 2019. The housing association has also agreed a £35m private placement with Canada Life Investments.
This 30-year private bond issue will enable finance to be drawn down in stages over the next two years, providing the private finance element to support new development over the next 4 years.
The deal marks the start of a new relationship between PoLHA, Bank of Scotland and Canada Life Investments.
Keith Anderson, chief executive for PoLHA, said: “The mix of short-term funding with a longer-dated private placement provides us with a flexible and tailored finance package to support our needs. It is also clear to us that even through the recent political uncertainty that the capital markets have demonstrated their support for the work we do and for our future growth plans.
“The Bank of Scotland and the Lloyds Capital Markets Team have supported us every step of the way as we have secured our new funding facilities, providing us with certainty around availability of funds and long term rates for our development programme.”
Chris O’Neill, relationship manager in the social housing team at Bank of Scotland, said: “Port of Leith has exciting development plans and we’re pleased to support them as they build new homes and continue to regenerate areas around Leith and North Edinburgh.
“This new funding demonstrates the appetite the investment community has for the sector and shows how a combination of conventional funding and private placement can provide tailored and flexible funding arrangements for housing associations.
“At Bank of Scotland we’re committed to helping Britain prosper, and supporting the social housing sector and the crucial role it plays across the country.”
David Marchant, who heads up Canada Life Investments, added: “The team at Canada Life Investments has worked with numerous housing associations over more than 20 years. Over that time we have developed a variety of funding solutions to meet our borrowers’ needs and we are delighted to have put in place this long term relationship with Port of Leith.”
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all well and good but where are all the children living in these homes going to attend school? All schools in North Edinburgh are already full to bursting and run down enough as it is