Under most construction contracts, the contractor takes on the ground conditions risk. However, a recent case has demonstrated that the risk can fall on the employer.
The deal reflects a major shift in housing association borrowing over the last 18 months with more than 50 per cent of long-term finance now raised on the capital markets – this had been dominated by bank lending.
Natalie Singh, partner and head of funding at ACS, who led the firm’s capital markets team, said: “I am delighted that we have completed our first ever listed bond, reflecting the growing appetite of the housing association sector to go to the capital markets to fund their longer term growth plans.
“This additional funding will have a major positive impact on the further regeneration of Walsall and the wider Midlands. It has been a challenging transaction to achieve in the timescales set.”
The new bond has also been partly used to refinance whg’s legacy bank debt from a syndicate of lenders. The spread over gilt achieved was 1.25 per cent.
The deal marks the successful completion of 18 months’ work, which has seen whg secure a strong A2 (stable) rating from Moody’s credit rating agency.
The joint book runners were Lloyds Bank and Santander. whg has retained £75m of the total amount for drawdowns in the near future.
Martin Robertson, Finance Director at whg, added: “We were very impressed with the professional, thorough approach of the ACS team. As clients we only glimpsed some of what went on as numerous documents were finalised and consents obtained. At all times, the team was calm, effective, concise and courteous - even when under great pressure.”
This transaction follows three other capital markets deals by ACS in recent months.
In September, ACS advised on the completion of a £35m private placement on behalf of Cheshire based Wulvern Housing, as part of its overall £216m refinancing.
Part of this included setting in place a new £60m facility agreement with Warrington Borough Council acting as an additional lender and restructuring its existing bank debt with RBS and Newcastle BS. The additional funding will be used by Wulvern to deliver over 1,000 new affordable homes across Cheshire.
Sasha Deepwell, Deputy Chief Executive of Wulvern Housing Association, said: “I appreciated the excellent support from ACS throughout what was a complex and unique deal which has provided Wulvern with long-term secure funding to meet much needed new homes across Cheshire.”
In June, ACS advised on the completion of a £40m direct investment over 20 years by L&G into Rooftop Housing Group. It allows Rooftop to fund 900 new homes across South Worcestershire and Gloucestershire and is based on staggered drawdowns from L&G through to August 2015. The transaction included Rooftop restructuring its existing bank debt with Lloyds and Nationwide.
Caroline Dykes, Finance Director of Rooftop Housing Group, said: “It was a real pleasure working with ACS to arrange new funding for Rooftop through L&G. Natalie Singh was very approachable and professional. She guided us through each step of the process which was something that was important to us as we had not been directly involved in arranging new funding before. Her instructions were very clear, we received regular updates on progress and on what to expect next. We achieved completion by the deadline agreed at the start of the process which was very challenging due to the short timeframe involved.”
Also in June, ACS advised on the completion of a £25m private placement with Shropshire Housing Group provided by Canada Life.
The UK Government has been consulting on how it should promote social value in its procurements. Here is our response that we submitted to the consultation...
The Tenant Fees Act 2019 came into force on 1 June 2019.
A recent case in the Court of Appeal will no doubt bring a sigh of relief for employers, but a corresponding sigh of disappointment may be uttered for equality and gender balance in the workplace.
This briefing assists response to the consultation paper by outlining the consultation questions, providing some background information and prompting some thoughts and potential answers.
A report published on 29 May by the Institute for Fiscal Studies (IFS) has found that since 2009-10, local government spending on services has fallen on average by 21% in real terms.
A long-awaited decision of the Court of Appeal has clarified that a lower standard of proof should apply than previously thought before an Inquest can return a conclusion of suicide.
New regulations come into force on 1 June 2019, amending the Section 21 (s21) prescribed form template for use with assured shorthold tenancies.
In a challenging economic climate with continuing budget cuts and increasing expectations of staff, sickness absence remains an ongoing problem that is important to address.
Social housing providers will routinely have a number of construction projects underway at any one time. It is essential for client teams to understand and avoid key contract management pitfalls.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.