Pension Insurance Corporation (PIC) has invested £40m with Halton Housing to finance affordable property developments across the UK.
The specialist insurer said the long-dated, senior secured debt issue will be used to finance Halton's plans to deliver more affordable housing as well as to repay maturing debt.
It said the funds would be made available at an agreed future date so as to minimise cost of carry.
Halton Housing, which holds 7,000 properties in the Cheshire towns of Runcorn and Widnes, was advised by Link Asset Services for the transaction. Lloyds Bank acted as sole agent.
To date, PIC has invested £1bn in social housing across the UK and has confirmed plans to work with more housing associations and other housing providers over the coming years.
According to PIC debt origination manager Marno Jooste, the deal in long-dated, senior secured debt will "bolster PIC's investment and promote further support for social housing projects" throughout the country.
Jooste said: "We are delighted to have come to an agreement with Halton Housing on this competitive transaction. The maturity profile and deferred drawdown structure is well-suited to our liabilities and represents an attractive investment."
Adding: "PIC needs to match pension cashflows over very many years. Working with housing associations has been beneficial for all sides as they get long-dated funding, with draw down flexibility and other features matched to their exact needs, whilst we get long-dated cashflows sculpted to match our pension liability payments while having the investment secured on social housing properties."
Halton Housing executive director of business services Neil McGrath said: "We are very pleased to have entered into this funding agreement with Pension Insurance Corporation, which will allow us to build additional social housing in an area where demand is high.
"The deferred characteristic allows us to lock in certainty of funds at attractive interest rates well ahead of when the funds need to be utilised, resulting in cost of carry savings. As a result, Halton can continue to support the local population of Runcorn and Widnes with our high-quality, affordable housing."
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