Housing association L&Q has secured a revolutionary £2.6bn refinancing following the completion of its merger with East Thames Housing Association.
The newly agreed facility will allow it to borrow more at a higher gearing ratio but, with the sector maturing, at a lower cost to fund its massive expansion plans.
As housing associations, L&Q and East Thames’s previous facilities were highly restrictive in terms of the level of debt they were allowed to take on its new arrangement will bring it more in line with private developers.
Housing association L&Q has secured a revolutionary £2.6bn refinancing following the completion of its merger with East Thames Housing Association.
The newly agreed facility will allow it to borrow more at a higher gearing ratio but, with the sector maturing, at a lower cost to fund its massive expansion plans.
As housing associations, L&Q and East Thames’s previous facilities were highly restrictive in terms of the level of debt they were allowed to take on its new arrangement will bring it more in line with private developers.
SEE ALSO: Estates Gazette’s exclusive interview with L&Q’s chief executive David Montague
The eight banks participating, which all have existing relationships with the company, are: Barclays, Dexia, HSBC, Lloyds, Nationwide, RBC, RBS and Santander.
The housing association is aiming to borrow up to a further half a billion a year, and if it did this for the next 10 years it could amount to up to £5bn of further bank debt. This is alongside the £600m-£700m that L&Q intends to raise in the bond markets each year.
The merger, which completes today, has created a company worth £22bn with in excess of 90,000 homes under management around London and the South East, which were it listed would make it one of the 50 largest quoted companies in the UK.
Chief executive of the new company, David Montague, said it intends to use this clout to create 100,000 homes over the next 10 years, around half of which will be affordable, and half for private rent and sale.
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