Pension Insurance Corporation has invested £60m with Red Kite Community Housing, a regulated housing association based in High Wycombe.
The insurer's £60m deal was split across three tranches maturing in 2030, 2033 and 2040, to match its pension liabilities
The funding arrangement will allow Red Kite to build up to 375 new homes, as well as refinancing existing debt.
It was partly deferred for 12 months, providing certainty of funding cost for Red Kite, but reducing the cost of carry.
PIC senior debt origination manager Liz Cain added: "By working directly with Red Kite we have been able to shape a funding agreement which meets the needs of both parties, allowing the development of social housing, as well as backing the payment of our policyholders' pensions on a secured basis."
Red Kite said the funds would be used to refinance existing debt and fund future housing development.
Group director of resources Ray Prior said: "This funding arrangement gives us everything we need, particularly with greater flexibility, to deliver on our ambitious plans. We have many exciting things to do now and the new financing makes those plans much more of a reality. For our customers, this will be invaluable in improving their homes and the lives of our communities."
Financial risk advisors J.C. Rathbone Associates (JCRA) advised Red Kite on the funding, which was raised through a private placement, while NatWest Markets acted as sole agent.
NatWest Markets head of private placements Siobhan Duffy said: "This innovative transaction transforms Red Kite's financing structure, demonstrates the continued investor appetite for high quality credits and highlights the importance of a well-structured and considered approach to the private placement market."
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