Pension Insurance Corporation (PIC) has refinanced existing debt for UK-based social housing provider Red Kite Community Housing. The refinancing consists of a £60 million ($79 million; €67 million) facility.
The facility is being used to refinance bank debt. The provider of this initial debt could not be determined by time of publication.
The facility is also split into three different tranches with varying maturity dates. The three tranches mature in 2030, 2033 and 2040, respectively.
The refinancing is being structured this way to better match PIC’s pension liabilities. “We’ve got long-dated pension liabilities and we need assets to match those liabilities,” Liz Cain, senior debt origination manager for PIC, told PDI. Social housing in general, according to Cain, represents an attractive way of matching these liabilities.
Cain added seeking different tranches when completing a deal like this is usual practice for the firm. “We’d normally try to have some flexibility on maturity,” she said.
UK-based PIC provides insurance services to defined-benefit pension plans. This recent investment takes capital invested in social housing by PIC up to £900 million, a company announcement noted.