Arlingclose has arranged £450m of lending facilities for housing associations. Our facilities have featured in Social Housing Magazine, and we’ve hosted Breakfast Briefings at two of the last three NHF Treasury in Housing Conferences, discussing the whys and wherefores of local authority funding with borrowers and solicitors.
Our latest transaction took the total raised for larger housing associations over the past few years to £250m. 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 180 local authorities, charities, universities and financial institutions. 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. Our transactions are 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. This can play a part in decision-making around appropriateness, and is certainly something housing association borrowers should be looking to take advantage of.
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 and small, rated or unrated.
Our facilities have always delivered an economical and less burdensome solution for housing associations, particularly when all-in costs are considered in comparison with bank funding. The unsecured nature of the facilities and simple loan terms reduce overall cost and administration, which is why we tend to see existing borrowers looking to extend and renew facilities ahead of maturity.
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 Treasury in Housing Conference in London in October. We’d be pleased to discuss funding transactions or any other arrangements between housing associations and local authorities when our experience and knowledge can be applied. Please also email nkeeling@arlingclose.com if you would like to discuss.
