Bromford completes second deferred funding deal in two months
Bromford, one of the largest housing associations in the Midlands and South West, has closed its second deferred new funding deal in the space of two months.
The housing association has finalised a new GBP90 million deal with a leading UK investor. The 44,000-strong housing association will use the funding, which is deferred for 18 months, to finance its ongoing housebuilding programme which aims to deliver 12,000 homes over the next eight years. The funding was secured at Bromford’s record low coupon despite the long dated nature of the deferral.
It’s the latest in a string of successful funding transactions for the Midlands-based provider, and the second long-dated deferred deal Bromford have entered into since the onset of Covid-19. The deal follows the GBP100 million private placement agreed with LGIM which will be drawn in May 2021 and brings Bromford’s total funding activity in the last two years to over GBP1bn.
Bromford is one of the highest-rated housing associations, with an A2 stable rating from Moody’s and an A+ stable rating with Standard & Poor’s, and is a strategic partner to Homes England.
Bromford’s head of treasury Imran Mubeen says: “We remain absolutely committed to our strategy of developing more homes to meet this country’s growing demand for social and affordable housing. We have continued to stress test our cashflow and business plan to reflect new Covid-19 scenarios, all of which confirmed that we require new funding in early 2022.
“These deferred funding deals deliver certainty on the availability of future funding at record low rates and allow us to approach our future development objectives with confidence. We have long established several routes to market and have once again mobilised quickly to lock in our record low coupon with an established investor who endorse our business plan and the understand way we work.”
Grant Vaughan, a partner at Newbridge Advisors who advised on the transaction says: “Once again Bromford have demonstrated how a nimble and proactive treasury strategy can yield fantastic results and de-risk the business plan. Taking advantage of the current market conditions has locked in significant value for the group.”