Housing Association Funding Arrangements Nick Keeling nkeeling@arlingclose.com

Arlingclose has arranged around £400m of lending facilities for housing associations. Last year we were featured in Social Housing Magazine alongside Optivo, prior to its amalgamation with Southern Housing, describing the then latest 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

Two new revolving facilities arranged by Arlingclose are due to commence in the next few weeks; a £45m facility will go live at the end of this month, with another £50m facility completing in April. These two transactions will take the total raised for four housing associations over the past two years to £200m.

Arlingclose provides treasury management advisory services to around 150 local authorities, and our success in arranging these transactions is largely due to the flexibility of our clients. 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 been relatively large at an average of 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. That desire remains, however, and we will be very pleased to discuss lending opportunities with housing association both big and small, rated and unrated.

Arlingclose is exhibiting at the NHF Finance Conference in Liverpool this week at stand 810. 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.

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