Stonewater issues £100m from new funding facility to help drive ambitious housing programme
Leading social housing provider Stonewater has signed a $150 million funding facility to help drive its ambitious housing development programme which is set to deliver 2,765 new homes across England by 2021. Stonewater secured the loan facility from Pricoa Capital Group, the principal asset management arm of US financial services group Prudential Financial.
With an A1 Moody’s Investors Credit Rating, the £160 million turnover housing organisation is one of the UK’s major social housing providers, with 30,000 homes under management and £1.6 billion in assets.
Stonewater will initially issue £100 million of notes from the facility with a maturity of 30 years and a weighted average life of 28 years. The all-in coupon rate on the drawdown was under 3.1%. While the size of the facility is set in dollar terms, Stonewater issues in sterling and takes on no currency risk.
Stonewater can issue the remaining notes at any time over the next three years with a choice of maturities. This facility provides a secured source of cheap, long-dated funding with the added benefit of offering a potential source of further liquidity in the future at short notice.
“This funding exercise highlights continued investor confidence in Stonewater and we are very pleased that Pricoa Capital Group has become a new funder for us,” says John Bruton, Executive Director of Finance at Stonewater. “We are keen to take advantage of current long-term rates to maximise our ability to provide additional social housing in the coming years, and securing this new facility is an important part of our wider funding strategy.”
The facility was provided by Pricoa Capital Group, a new institutional investor for Stonewater, further diversifying Stonewater’s investor base – an important consideration, particularly for larger registered providers.
TradeRisks acted as arranger and advisor to Stonewater, with Devonshire’s LLP and Morrison & Foerster (UK) LLP acting as legal advisers.
Edward Jolly, Senior Vice President at Pricoa Capital Group, comments: "Pricoa Capital Group is very pleased to become a funding partner of Stonewater and to be supporting the social housing provider in its development programme. We value the ability to work with Stonewater, providing a funding structure that enables quick and efficient access to long-term funding.”
John Coleman, Director at TradeRisks, comments: “We are delighted to have supported Stonewater in this very successful round of funding. This process demonstrated that there is a strong appetite for high quality credits and that it is important to take a well-considered approach to the market.”