Legal & General has purchased a £150m loan to the Hyde Group, its first purchase of an existing housing association loan.
The loan, originally issued by Santander, has a final maturity in 2041 and is the third loan on L&G’s books to the housing group.
The previous two loans were non-recourse loans provided in 2013 to subsidiaries of the housing association, Hyde Southbank Homes and Hillside Housing Trust.
The insurer plans to adjust the terms on the £150m Santander facility to add flexibility, including eliminating financial covenants in order to help Hyde meet its long-term business objectives.
Alex Gipson, social housing lending manager at Legal & General, said: “Building on our ongoing relationship with Hyde and our strong understanding of its business model, management team and culture, this deal demonstrates L&G’s continued confidence in key players within the social housing sector as they positively respond to the recent challenges set by government.
“Our long dated money is a good match for this type of loan and sector. While there has clearly been a desire by existing mainstream bank lenders, such as Santander, to work with institutions to refinance existing long- term loan commitments, this is the most significant example and has required a constructive approach by all three parties.”
