Raven secures £300 million sustainability-linked deal
Surrey and Sussex-based housing provider Raven Housing Trust has worked with Savills Financial Consultants and its existing lenders to agree a private placement and loan facility package worth £300 million.
This sustainability-linked funding will be used to help Raven deliver its plan to build more than 630 homes by 2026, as well as support the organisation with its net zero-carbon commitments.
The 7,000-home housing association has refinanced and secured new long-term debt to support its corporate plan of getting all its homes to a minimum of EPC rating C by 2030, and then to net zero-carbon by 2050.
The private placement will help deliver the commitments made by Raven in its Sustainable Finance Framework. These commitments include building more affordable and sustainable homes. In addition, the revolving credit facility includes options to agree sustainability-linked KPIs at a later date.
The funding consists of a £130 million private placement provided by the Pension Insurance Corporation (PIC), £145m restructured and new debt from Lloyds Bank – including a new £50 million revolving credit facility – and a further new £25 million revolving credit facility from Barclays Bank.
The refinancing takes advantage of Raven’s increased balance sheet capacity, following its decision to revalue its homes from Existing Use Value – Social Housing (EUV-SH) to Market Value – Subject to Tenancies (MV-ST). This four-year process resulted in a value uplift of £300m and has allowed Raven to secure competitively priced funding to support its sustainability plans.
Raven was formed in 2002 by the transfer of council homes from Reigate & Banstead Borough Council. Since then, it has developed more than 1,000 new affordable homes and has a growing development pipeline of new homes.
Mark Baker, Financial Director at Raven, said: “We are delighted to have secured such competitive additional funding to continue providing new homes, to meet the affordable housing need in our local area. We look forward to working with new and existing funders in meeting our sustainability ambitions for current and future homes.”
Mike Roche, Director at Savills Financial Consultants, said: “This is a really good result for Raven and its customers. The organisation has been able to access substantial additional funds at rates significantly lower than todays. We are proud to be able to help such a forward-thinking housing provider as Raven to deliver on its sustainability commitments for existing and new homes.”
Vladan Martinovic, Debt Origination Manager at PIC, said: “The purpose of PIC is to pay the pensions of our policyholders over many decades, so by continuing to invest in long-dated, secure cash flows, such as our Raven investment, we are securely backing future pension liabilities. It has been a pleasure to deal with the team at Raven. We are proud to be able to help them develop much needed homes, whilst at the same time securing the pensions of our policyholders.”
The transactions were completed in March, April and May 2022.
Funding package details:
- Financial Advisor: Savills Financial Consultants
- Funder: Barclays Bank, Lloyds Bank and PIC
- Raven’s Legal Advisors: Anthony Collins (financing) and Trowers & Hamlins (security)
- Investors’ Legal Advisor: Addleshaw Goddard
- Valuer: JLL
Mark Baker, Financial Director at Raven
New homes for affordable rent, Handcross, West Sussex