Improving Society

Housing association £200m public bond issue

Securing funding to support housing shortfall

We advised Futures Housing Group on its debut £200m public bond issue as part of a wider £310m refinancing exercise that will help deliver Futures’ £170m development programme aimed at building 1,200 new homes over the next five years.

The refinancing project was Futures’ first-ever major refinancing and was their first experience of raising funds on the debt capital markets so they relied heavily on the experience of ACS, the bookrunners and their retained treasury advisors to guide them through this process. The legal work for the new funding included setting up two new special-purpose treasury vehicles to streamline treasury operations across the Group and so the financial covenants applied across the Group and increased its financial capacity.

How we helped

The ACS property charging team carried out due diligence on over 9,000 properties owned by Futures well in advance of the refinancing to allow the security work to take place as quickly and easily as possible.  This required 1000s of titles to be reviewed, individual properties reconciled with other documentation and numerous searches to be carried out and reported upon.

Due to the tight timeframes, we agreed upfront with Futures, the bookrunners, the existing bank lender and its lawyers a timetable to review and agree the relevant documents so there was no impact on the competitive pricing they were looking to achieve.  The 25-year bond, issued by Futures Treasury plc (for onward lending in the Group), had an assigned Standard & Poor credit rating of A+, with negative outlook, and created a competitive rate of 168 basis points over gilts and a coupon of 3.375%.

Futures is now in a position to help meet the need for new housing across the East Midlands where there is a 25,000 home shortfall.

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