Pension Insurance Corporation (PIC) has made a £100m investment in social housing with Accord Housing Association.
Following a full market tender, the defined benefit (DB) insurer was chosen as the sole lender and entered a long-dated, senior secured private placement with the regulated housing association.
The transaction features a range of maturities spanning over 30 years, a maturity profile tailored to match PIC's pension liabilities when public bond markets do not provide its required cashflows, and deferred drawdown to reduce cost of carry for Accord. All debt was secured on Accord's existing housing assets.
The investment will be used to repay existing maturing loans and to finance the development of 1,500 homes over the next five years. It is part of a wider funding strategy which has seen the housing association raise £185m since 2016.
PIC debt origination manager Marno Jooste thanked all parties involved, adding social housing and other illiquid assets allows it to generate enhanced yield, which in turn helps to secure more pension liabilities through buy-ins and buyouts with DB schemes.
Accord executive director of resources Stuart Fisher added: "We are delighted to have secured a £100m funding facility with a new investment partner, PIC, an established and well-respected funder to the social housing sector."
The deal is the latest in a string of PIC investments in social housing, so far totalling more than £1bn. In April, the insurer made a 30-year debt investment in Phoenix Community Housing, following a £40m investment with Halton Housing in January.
PIC confirmed it has further plans to work with more housing associations and other housing providers over the coming years.
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