Network Homes has agreed a private placement of £175m, financed by six US and Canadian investors, to fund delivery of its 3,000-home pipeline.
The debt comprises £150m of secured borrowing and £25m of unsecured borrowing that has a 15-year maturity term and is priced at 3.52%.
Maturities for the secured debt range from 12 to 35 years, with most of the money due for repayment in 20 to 35 years’ time. The pricing ranges from 2.94% for £19m of 12-year debt to 3.65% for £47m of 30-year debt and £38m of 35-year debt.
Network Homes has committed to starting 1,752 homes in London by 2021 through its strategic partnership with the Greater London Authority, with further building in Hertfordshire supported by Homes England’s Shared Ownership and Affordable Homes Programme.
Barry Nethercott, Network Homes’ executive director of finance and governance when the deal was struck, said “The North American markets have been showing keen pricing and excellent flexibility of approach of late, and we wanted to take advantage of those conditions to deliver on a number of corporate objectives.
“In particular, we wanted to smooth out our debt repayment profile by creating a good range of maturities, focusing on time points where we had little else to repay, and it seemed sensible to also consider a small level of unsecured funding, where we could be more flexible about the assets we set against it.”
The placement was arranged by Mitsubishi UFJ Financial Group (MUFG). Winckworth Sherwood’s social housing finance team advised Network Homes.
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