Macquarie and MUFG provide £150 million of debt financing for West London social housing development
London, 20 Jul 2018
Macquarie Infrastructure Debt Investment Solutions (MIDIS) and MUFG Bank (MUFG) have provided a long-term debt facility of £150 million in the form of a three year revolving credit facility (RCF) of £30 million, a 40 year senior secured private placement of £50 million that refinances the RCF, and a shelf facility of £100 million for Shepherds Bush Housing Association (SBHA).
SBHA owns or manages over 5,000 homes that are largely social and affordable, primarily located in the popular area of the London Borough of Hammersmith and Fulham. The funding will allow SBHA to boost their affordable and shared ownership housing provision. The chronic shortage of affordable homes in West London, coupled with high property prices, continues to drive the need for social housing. MIDIS and MUFG are proud to be supporting SBHA’s ambition to improve the situation in West London, with SBHA targeting the development of around 200 homes per year over the next four years.
Gareth Edwards, an Associate Director in MIDIS, said: “We are delighted to be able to support the provision of greatly needed affordable housing through SBHA, and we look forward to working in partnership with them over the term of the facility. Increasingly local housing associations are looking for alternative strategies to help meet longer-term funding requirements to support further investment, which is where institutional investors come in. The social housing sector is highly attractive to many investors because it offers long-term, secure, regulated and stable cashflows, and delivers a strong social impact.”
This is MIDIS’ third investment in the UK social housing sector, taking total commitments to over £200 million. This is expected to continue as housing associations raise finance to address the housing crisis in the UK, and institutional investors are increasingly attracted to the sector.
Sanjay Narbheram, Director of Housing Finance at MUFG, said: “We are delighted to have supported SBHA, particularly as it represents their first combined bank and institutional debt transaction. The strength of SBHA’s credit allowed us to run a competitive process to source institutional funding, which resulted in us successfully working with MIDIS. We see growing interest within the sector from a debt capital markets perspective, and this deal is a wonderful example of MUFG’s desire to work more closely alongside institutional investors. The sector continues to grow in importance for MUFG as we start to widen our client base, from both a geographical and unit number perspective.”
Mohit Jain, Director of Finance and Development at Shepherds Bush Housing Association, said: “We are aiming to significantly expand our development pipeline over the next few years and are very pleased with the financing achieved with MIDIS, who has taken a long-term outlook on our business, and shown flexibility and willingness to listen to our funding needs. We look forward to building a long-term partnership. This combined with the shorter term RCF with MUFG provides a good match for our funding needs.”
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About Macquarie Group
Macquarie Group Limited (Macquarie) is a diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities. Founded in 1969, Macquarie employs 14,469 people in 25 countries. At 31 March 2018, Macquarie had assets under management of £309.9 billion. For further information, visit www.macquarie.com
About Macquarie Infrastructure Debt Investment Solutions
In early 2012 Macquarie established the Macquarie Infrastructure Debt Investment Solutions (MIDIS) platform to leverage the infrastructure expertise within Macquarie into an investor-aligned global infrastructure debt investment management business. The MIDIS platform has been successful in securing mandates with insurer and pension scheme clients and has a track record of investing at attractive yields.
Mitsubishi UFJ Financial Group, Inc. (MUFG) is one of the world’s leading financial groups. Headquartered in Tokyo and with approximately 360 years of history, MUFG has a global network with over 1,800 offices in more than 50 countries. The Group has over 150,000 employees, and offers services including commercial banking, trust banking, securities, credit cards, consumer finance, asset management, and leasing.
The Group aims to be the world’s most trusted financial group through close collaboration among its operating companies, and to respond to all of the financial needs of its clients, serving society, and fostering shared and sustainable growth for a better world.
MUFG’s shares trade on the Tokyo, Nagoya, and New York stock exchanges.
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