Macquarie has provided long-term finance to a West Oxfordshire housing association through its infrastructure debt platform, PDI sister title Real Estate Capital reported.
Macquarie Infrastructure Debt Investment Solutions (MIDIS) provided an £80 million (€109.7 million; $120.1 million) 40-year loan to refinance Cottsway Housing Association. The loan is secured against a portion of Cottsway’s 4,500 social housing properties.
The facility will be drawn down in two tranches and will mature in 2055. In addition to the loan, MIDIS and Cottsway have signed an agreement whereby Cottsway can borrow an additional £50 million under similar terms.
“Investing in a regulated asset class like social housing provides our investors with the opportunity to de-risk and diversify their portfolios,” said Kit Hamilton, managing director of MIDIS. “With strong demand for social housing, we are pleased to provide our investors with a robust asset over the forty year term and provide Cottsway with a flexible debt funding solution.”
The deal is MIDIS’s first in the regulated social housing sector. MIDIS has made 26 debt investments since 2012, deploying more than £1.3 billion into debt investments across 13 infrastructure sub-sectors.
“Having carefully considered the merits and implications of a listed bond issue and in the light of market conditions, a decision was taken to proceed with a private placement,” said Robert St John, partner at Centrus Advisors which advised Cottsway. “Following meetings, arranged by Centrus, with a selected number of institutional investors, MIDIS was chosen as the preferred investor.”