PIC invests £40m in housing association
Pension Insurance Corporation (PIC) has invested £40m in debt issued by Scottish Borders-based Eildon Housing Association.
The housing association provides rented homes for tenants, as well as care and sheltered housing, and is set to build 750 new homes by 2021, with PIC's investment being used to support this development plan.
The debt is secured on a pool of housing assets and the funding will mature in 2053 and 2055.
The maturity profile has been designed to match PIC's pension liabilities when it will be difficult to source public bonds to match cashflows.
A drawdown of £15m of the loan is deferred until 2020 in order to provide Eildon with certainty of debt cost.
The investment marks the first private placement PIC has done with a Scottish housing association, although it has previously invested more than £1.5bn in the UK's social housing sector.
Eildon chief executive Nile Istephan noted the importance of the partnership and said the company was "delighted to have secured PIC's investment".
He continued: "These funds are crucial as we seek to build 750 new homes. I want to thank the PIC team for their flexibility and proactive approach in helping close this deal."
PIC senior debt origination manager Liz Cain said: "We are very pleased to have worked with the team at Eildon… We were impressed with their strategic focus, standards of governance and long-term approach."
The transaction was arranged by Santander Corporate and Investment Banking.
Santander head of private placements Tony Fordham added: "We are very pleased to have facilitated a competitive private placement process, enabling Eildon to raise £40m from PIC, so they can continue with their programme of building affordable housing across the Scottish Borders.
"Investors were attracted to Eildon's very sound financial performance and strong management team."
In April, the insurer revealed it had entered into a £65m agreement with Livin Housing to develop affordable housing in County Durham, and in January it invested £125m in university accommodation for the University of Exeter, following a £37m investment in student accommodation debt at the same institution last July.
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