Pension Insurance Corporation plc (“PIC”), a specialist insurer of defined benefit pension funds, has invested £75 million in debt issued by Trident Housing Association, a housing association based in the Midlands.
The funds will be used to refinance existing long-term debt, allowing Trident to plan further growth and develop more social housing stock. To date, PIC has invested over £2 billion in the UK’s social housing sector. The transaction was arranged by Savills Financial Consultants (“SFC”).
Trident Housing Association has almost 60 years’ experience of delivering homes, services and innovation for up to 8,000 people in almost 4,000 homes in some of the most disadvantaged communities in the Midlands. It employs more than 750 staff, works with over 150 volunteers and provides training places and apprenticeships for many more.
Key points of the transaction:
• £75 million spot funding maturing in 2051 and 2053
• Maturity profile has been tailored to match PIC’s pension liabilities in years where it
is difficult to source cashflows in the public bond markets, as well as meet Trident’s
• The debt is secured on a pool of housing assets
• The funds will be used to refinance existing long-term debt, providing Trident with
more flexibility in their future development
The sector continues to be important for PIC to invest in. PIC’s experienced, specialist in-house team has a strong track-record of working with housing associations on bespoke funding transactions.
Colin Small, Chair of the Trident Group, said: “As a G1/V1 rated organisation with a proud history this deal will fund our strategy to develop new homes whilst improving reserves and liquidity. We are delighted to work with PIC to help us meet these ambitions.”
Simon Hatchman, one of Trident’s Board Members and Chair of the Group’s Audit and Assurance Committee, said: “This is a key staging post in our plans for growth. The long-term funding secured is at a fixed rate which comes in well below business plan assumptions, and the transaction has improved our asset efficiency in support of future borrowing capacity. The deal represents a further boost to Trident’s financial resilience.”
John Nixon, Interim Group Finance Director at Trident, commented: “Whilst these transactions are becoming more mainstream in the social housing sector, this is the first time we at Trident have worked with an institutional investor on a tailored debt issuance.
“The end result is an excellent fit for both parties, and it was a pleasure to work with the team at PIC
who were straightforward in structuring and implementing the transaction.”
Eugenia Korobova, Debt Origination Manager at PIC, said: “We are pleased to have worked with the team at Trident to secure this investment and were attracted to their strong leadership team and risk management approach. This investment provides us with the characteristics we want in our portfolio – low risk, long-term, secure cashflows that are closely matched to our pension liabilities.”