M&G refinances Scottish social housing group

M&G has provided £45m of fixed-rate debt through a private placement arranged by RBS in a first for Scottish social housing.

M&G Investments has helped Scottish housing association Link Group to refinance by issuing £45 million in new debt. It is believed to be the first bilateral investment in a Scottish housing association by a long-term institutional investor, M&G said in a statement on Thursday.

M&G provided a 31-year fixed rate investment to refinance the Edinburgh-based housing association's existing bank debt and “meet development ambitions over the coming years.” RBS' private placement team sourced the investment.

The deal reflects a greater involvement of private investment managers providing debt in a market traditionally saturated by banks. “Non-bank lenders such as M&G are providing an increasing amount of finance over the long-term,” the statement from M&G read.

Mark Davie, head of social housing at M&G Investments, said: “This is another high quality private placement that delivers low-risk cash flows to our clients over the long-term. M&G has invested in excess of £4 billion in UK social housing through property transactions, public bonds and private placements. Much of that investment has come since the start of the financial crisis and we’re keen to do more.”

Clive Barnett, a managing director in RBS' housing finance team, added: “Link is a long-standing RBS customer and we're very pleased to be able to arrange this level of funding, which offers long term security, facilitates growth and complements the continuing loan funding provided to Link by RBS.”

Link Group, the largest housing association in Scotland, delivers 200 new homes each year. It reaches around 10,000 people in 26 of Scotland’s 32 local authority areas, mainly in the Scottish central belt.