Pension Insurance Corporation, a specialist insurer of defined benefit pension schemes, has made a second private placement investment of £30m in secured debt issued by Heart of Medway housing association, part of MHS Homes Group.
This is PIC’s fifth transaction, involving a total of £160m of lending, with MHS as part of a long-standing partnership.
The transaction is split across two tranches – £20m at commencement and £10m deferred by 24 months, both carrying a 20-year maturity.
It enables Heart of Medway to access flexible, long-dated funding against the backdrop of a challenging macroeconomic environment across the UK’s social housing sector. PIC’s ability to provide deferred drawdown makes it an especially attractive lender.
PIC was the sole investor on the transaction, while Centrus acted as sole arranger.
Bruce Shelmerdine, group finance director at MHS Homes Group, said: “There is a huge demand for affordable housing in Kent, and this new private placement, a result of our long-term relationship with PIC, will help us continue to meet the needs of our local communities.”
Celia Franch Lopez, debt origination manager at Pension Insurance Corporation, said: “PIC continues to be an active lender to housing associations as investment in this sector generates social value while meeting our need for long-term, secured cash flows to match our liabilities.
“This allows us to fulfil our purpose to protect PIC’s policyholders’ payments over the long term, and benefits tenants who will live in the homes built as a result of our long-term partnership with Heart of Medway.”
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