Legal & General Completes First Social Housing Lending Deal to the Hyde Group.
08 March 2013
Legal & General (“L&G”) announces that it has agreed a new £102 million, 15 year debt facility to The Hyde Group (“Hyde”), one of the largest housing associations in England, representing its first loan to the sector
The deal is structured as separate loan agreements to two of Hyde’s core subsidiaries, Hyde Southbank Homes Ltd (“HSH”) and Hillside Housing Trust Ltd (“Hillside”), providing £61 million and £41 million respectively. The loans are non-recourse to Hyde and at a fixed rate for their duration.
Formed in 1967, with the aim to make a lasting difference, Hyde has grown into one of the main providers of social housing in London and the South East. Hyde owns or manages circa 49,000 properties with a wide range of tenures, making a significant contribution to meeting housing needs and improving people’s quality of life.
This loan marks L&G’s commercial lending business’s (“CLL”) entrance into the social housing sector, having announced its intention to do so last year and subsequently hired specialist, Alex Gipson, from RBS, as well as additional resourcing in the credit team at the start of 2013, to support this process. L&G believes it can fill the gap left in the market for associations that want to borrow smaller amounts by providing bi-lateral loans, down to as low as £25 million, and more bespoke solutions than the capital markets or banks are able to provide.
Commenting on the deal, Simon Peacock, Group Finance Director at Hyde, said: “We are delighted to have secured these loans, which will enable us to continue our momentum in making a lasting difference to housing availability in key locations. We were very pleased by the options offered to us by L&G, which enabled us to take advantage of favourable all-in costs of financing available in today’s capital markets and for a duration which matches the long-term nature of our business. We look forward to a long and productive relationship with them.”
Alex Gipson, Social Housing Lending Manager at Legal & General, added: “The very nature of an insurer’s long-term pension and life insurance liabilities provide much closer alignment with the borrowing desires of the Housing Association sector. The housing need is not only an incredibly pressing one today, but stretching far into the future, and Hyde is a strong, long term operator with an inspirational and dynamic approach, which recognises that its funding provisions have to match its business profile.
We were pleased to be able to explore several options with Hyde before settling on the preferred solution and it convinces us that our approach, which is a “tell us what you want to achieve and we’ll see how far we can help you”, will find favour in the movement.”
Hyde was advised by LCF Edmond de Rothschild Securities Limited, the London corporate finance arm of the Edmond de Rothschild Group.
Notes to editors
Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £406bn of assets on behalf of more than 3,300 clients (31 December 2012) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 16 separate funds or vehicles and two segregated mandates with an aggregate asset value of £10.4bn as at 31 December 2012.
These funds include:
Specialist Pooled Funds
The Leisure Fund Limited Partnership; Industrial Property Investment Fund; Arlington Business Parks Partnership; and the English Cities Fund
Single Asset Vehicles
Bracknell Regeneration Partnership; Central Saint Giles Partnership; Performance Retail Limited Partnership and Warrington Retail Limited Partnership
Life Fund; Linked Pensions; Linked Life; Managed Fund; Property Unit Trust; UK Property Income Fund; LPI Income Property Fund and the Hybrid Property Fund
LGP’s UK-focused fund management platform has built and retained a strong track record of out-performance across the sector. Owing to its size, diversity and penetration, it benefits from best in class banking and property industry contacts which, along with its wealth of in-house skill and expertise, have enabled it to continue to attract and secure high quality market opportunities. Taking a client-centric approach, the business places the highest priority upon integrity and transparency, leveraging upon the significant resources provided by the wider LGIM platform. Sector specialists cover each sphere of the market and are supported by LGP’s market-leading research capability.
LGP’s sector specialisms cross all facets of the real estate market. In particular, the Company has a major development platform, responsible for delivering the West End office market’s latest landmark, Central Saint Giles, and currently involved in developing its high profile Covent Garden scheme, Agar Street, as well as significant town-centre retail and leisure regeneration projects, including Bracknell, Trowbridge, Northampton and Eastbourne.
For more information please contact:
PR Manager, Legal & General Capital and Real Assets, LGIM (Property, infrastructure and alternative finance)
t: + 44 (0) 203 124 2777
m: + 44 (0) 7718 395 279
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