Arlingclose has arranged £400m of lending facilities for housing associations. We previously featured in Social Housing Magazine alongside Optivo, prior to its amalgamation with Southern Housing, describing a facility we arranged from a group of our local authority clients:
https://www.socialhousing.co.uk/news/g15-landlord-agrees-73m-of-borrowing-from-nine-councils-75853
And in October 2023, we hosted the Breakfast Briefing at the NHF Treasury in Housing Conference, discussing the whys and wherefores of local authority funding with two recent borrowers, Southern Housing and Sovereign Network.
During 2023 we closed two new £45-50m revolving facilities with large London-based housing associations. These two transactions took the total raised for four housing associations over the past two years to £200m. Importantly, we have also successfully extended existing facilities following requests by borrowers, both under the terms of and outside loan agreements.
Our success in arranging these transactions is largely due to the flexibility of our clients, as we provide treasury management advisory services to more than 150 local authorities. When we discuss opportunities with potential borrowers, one of our first lines of enquiry is determining the primary funding/financial challenges and what we can do to alleviate them. Each of the transactions outlined above is designed to meet a unique need of the borrower, in a way that is not available elsewhere on the market.
While financial terms obviously play a large role in the suitability of these transactions for lenders, it’s also fair to say that local authorities and housing associations are a natural fit in terms of meeting social needs. We’ve seen a definite leaning towards ESG-type investing across the local authority sector, which can play a part in decision-making around appropriateness, and is certainly something housing association borrowers should be looking to take advantage.
Our recent transactions have averaged around £50m, but that is not to say our clients have no interest in smaller sizes or housing associations. In terms of organisation and investment balance, our clients range in size from the small to the very large, and due to treasury management limits rather than desire, the former is less likely to be involved in large transaction sizes. We’ve even arranged a facility of less than £1m, and we will be very pleased to discuss lending opportunities with housing associations both big or small, rated or unrated.
Throughout the arrangement, Arlingclose acts as a liaison with the borrower, sometimes as a sounding board for proposals around possible changes to documentation, timing of facility drawdown or extension requests. Alongside merger consents, the local authority lenders have also been comfortable facilitating borrower requests on deviations to the loan agreement, where it doesn’t affect the medium-term creditworthiness of the housing association.
Arlingclose is exhibiting at the NHF Finance Conference in Liverpool this week at stand 809. We’d be pleased to discuss funding transactions or any other arrangements between housing associations and local authorities where our experience and knowledge can be applied. Please also email treasury@arlingclose.com if you would like to discuss.
Related Insights
Housing Association Funding Arrangements