LGIM Real Assets (Legal & General) has provided £100 million in deferred long-term financing to Bromford Housing Group (Bromford), the largest provider of affordable homes across Central and South West England. The funding will be drawn in 12 months’ time and will support Bromford’s strategic development goal to deliver 12,000 new affordable homes by 2028.
The delivery of these homes will serve the communities in which Bromford operates as well as playing an important role in getting the UK economy back on track.
The UK continues to suffer a shortage of affordable housing, with 1.3 million households on local authority waiting lists. As one of the UK’s leading housing associations, and a strategic partner of Homes England, Bromford has a key role to play in providing social and affordable housing to those whose needs are not met by the private markets in Central and South West England. Bromford recently announced their successful delivery of over 1,000 new homes in the year ended 31 March 2020 and have re-opened their development sites following the recent lockdown.
The investment has been made by LGIM Real Assets on behalf of its clients including Legal & General Retirement Institutional. Legal & General first invested in Bromford in 2012 and today’s additional commitment marks an important milestone, supporting Bromford to deliver 12,000 new affordable homes by 2028.
NatWest Markets acted as sole agent in Bromford’s private placement issuance, with Newbridge providing treasury advice. Legal advice was provided by Trowers & Hamlins and Addleshaw Goddard.
Steve Bolton, Head of Private Corporate Debt, Europe, said: “Legal & General is uniquely placed to invest annuity money into the UK economy, supporting its long-term pension commitments and creating real assets which provide new jobs, housing, productivity and wage growth. We have a role to play in supporting the UK through the Covid-19 crisis and this latest investment is testament to that support.
“Our investment in Bromford matches our extended liabilities and delivers both real economic growth and social value for the UK. We’ve seen lots of change in the past few months but the fundamental need for good quality homes remains a constant. There is an urgent need to provide stable homes for millions of households on waiting lists, and partnerships like this will help deliver on that need.”
Imran Mubeen, Head of Treasury, Bromford, said: “We have taken a proactive approach right across the business to managing the challenges and opportunities arising from Covid-19. We have now resumed development and look forward to delivering more homes and services at a time our communities and families rely upon us more than ever.
“We already benefitted from exceptionally high levels of liquidity and whilst there was no immediate requirement for new funding at this stage, this deferred deal reflects our pro-active approach to the market: locking in long dated funding at historically low rates to future-proof our new homes plan whilst matching future interest costs with our required liquidity profile.
It is important that we work with funders and investors who understand our long term strategic plan, and we are delighted to extend our partnership with LGIM who continue to support our journey and appreciate the way we work. This deal with LGIM provides near term funding certainty as we continue in our aspiration to deliver a further 12,000 homes by 2028.”
George Flynn, Vice President at NatWest Markets, said: “We are delighted to once again partner with Bromford on this successful £100m long dated, delay draw transaction. Through working closely with L&G and Bromford we were able to structure a flexible and competitively priced transaction to support Bromford’s long term strategic plan and growth agenda in order to deliver much needed affordable housing. This also demonstrates the continued support of long term investors for the social housing sector.”