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Newbridge supported Longhurst Group forward place a tap of its 3.250% May-2043 across three settlement dates. The £100m tap, which was priced at a significant premium to par, will settle in April 2022 (£25m), September 2022 (£25m) and April 2023 (£50m). Having been selected once again as a Homes England strategic partner, the proceeds will be used to support the next stage of Longhurst’s delivery of new affordable homes. Robert Griffiths, Deputy Chief Executive and Chief Financial Officer said: “We were really pleased to have worked with Chris and the team at Newbridge on arranging the tap to our 2043 bond and were delighted with the result. The £100m forward sale will help support our forward development programme and long-term Strategic Partnership with Homes England.” Chris Evans, Director at Newbridge Advisors commented: “We are delighted to have supported Longhurst in securing future finance at an extremely competitive rate which significantly de-risks its development pipeline. Furthermore, this innovative financing structure came from a new investor to the group, increasing the likelihood for further appetite in the capital markets going forward.”

Optivo has successfully sold all of the remaining Retained Bonds of their 2035 bond issue, a nominal amount of £100 million. The transaction was executed in mid August and saw Optivo capitalising further on the current low rate environment. This being the second consecutive fundraising advisory mandate with Optivo, Newbridge were delighted to support the process and help Optivo achieve the very best terms and seamless execution. For any queries, please contact Grant Vaughan - grant.vaughan@newbridge.co.uk, 07867 802 095.

Merger activity within the social housing sector has stepped up significantly over recent years and whilst many have been successful some have not. To be able to consider why mergers break down, we first need to understand why they are initiated in the first place. Whilst each merger will have its own individualisms, there are typically two reoccurring themes in the sector triggering the conversation, either: i. a Housing Association is financially stretched and would benefit from support; or ii. a Chief Executive is retiring. This is in stark contrast to the private sector where the rationale for a merger is far more objective; there is a price paid by the acquiror to the acquiree, meaning shareholders (including senior management) often are financially remunerated when the transaction takes place. As Housing Associations are charities without an equitable value, no such payment takes place and therefore, the whole process becomes more subjective. If we consider the two main themes separately, let’s start with the Housing Associations that would benefit from support. Whilst the sector has made great strides in its governance over recent years, from time to time, ambitious development plans have stretched some Housing Associations financially. As an organisation approaches, or even hits, its financial capacity, in order to continue to build and support customers the Housing Association would benefit from the financial backing of a larger more financially stable sector peer. This creates an interesting dynamic as the Board of the stretched Housing Association will face the likely prospect of being consumed by a larger peer, inevitably resulting in the reduction of decision-making powers. There will also be restrictions implemented which will limit autonomy of the Board. In addition there will be some cultural change. As a result of all of this, Board members may begin to question the new direction and job security becomes a concern for senior executives. These uncertainties can be major factors in why mergers fail to progress. If we believe that a support merger is fragile then a retirement driven merger is even more delicate. The housing sector has a reputation for retaining Chief Executives until retirement and, as a consequence, they serve long tenures. In some cases, the retirement prompts some to desire a new direction for the organization. In this situation you have all of the issues associated with a support merger plus arguably a less clear rationale for merging. The mantra that bigger is better is not always correct, organisations need to consider what any merger means for the various stakeholder groups including customers, colleagues, funders and local authorities. As an accountant I am always supportive of driving out cost synergies and putting in place more efficient operating models that spend the customers’ money more wisely. Organisations need to ensure the proposed efficiencies are deliverable and not consumed by lenders seeking fees for providing the required merger consents. Most importantly, the merging organisations need to ensure the services to the customers do not suffer as a result of the distraction caused by the merger. Stepping back from the underlying rational, we must also be mindful that the sector has an extensive reliance on the capital markets for funding, with more and more housing associations having listed debt, in their own name. The price of these freely tradable instruments reacts to merger announcements in our sector as they do in any other sector and there can be financial consequences for investors. We do therefore need to be mindful of when and how mergers are announced, appreciating the impact it has on our lenders, once made public. Insofar as it is possible factors that can derail a merger, after it has been announced, should be limited to unknown details resulting from the in depth due diligence process. In summary, I am a supporter of mergers within the sector when there is a clear rationale believing that consolidation can bring financial benefits, customer service improvements and allow Housing Associations to build more new homes. Indeed, I have worked on many mergers in both the private and housing sector and can reference some excellent success stories. That said, it is imperative that Boards and Executive teams fully understand the rationale for any potential merger, digging deeply into both the pros and cons prior to embarking on the journey. If you have any questions or would like to discuss mergers in the social housing sector in more detail please contact the author of this article Lee Gibson - lee.gibson@newbridge.co.uk, +44 7738 896501.

Transmission Capital Partners (“TCP”), advised by Newbridge Advisors LLP, has successfully reached financial close for the long-term ownership and operation of the transmission link to the 588MW Beatrice offshore wind farm (the “OFTO”), Scotland's largest operational offshore wind farm. INPP, one of three consortium members in TCP, will invest c£50 million in the Beatrice OFTO. Whilst project level senior debt is provided by a range of banks and institutional investors to match the 23-year maturity of the OFTO. The Beatrice OFTO will transmit green electricity generated by the wind farm’s 84 x 7MW turbines, equivalent to powering around 450,000 UK homes.

Newbridge has supported Bromford Housing Group (Bromford) in launching its inaugural Sustainable Finance Framework, helping to measure the impact of up to a billion pounds in ESG-linked funding over the next decade. The framework opens the door for Bromford to formally categorise capital markets debt as green, social or sustainable and complements its commitment to tackling some of the biggest environmental social and governance challenges of our time. The framework also represents a furthering of Bromford’s already strong levels of ESG transparency and accountability. To confirm full alignment with a set of industry standards, it received a second party opinion from S&P global ratings, their first in the social housing sector. Imran Mubeen, Director of Treasury at Bromford: "We are delighted to have published our Sustainable Finance Framework, a very important milestone in our ESG journey. From inception to accreditation, Newbridge provided dedicated support, advice and expertise, to a standard which we have come to expect. We have developed a long-standing relationship with Newbridge and look forward to working together again in the future.” Chris Evans, Director at Newbridge Advisors commented: “Establishing a framework is an important signal to the capital markets community that future finance, whilst not exclusive, is likely to be linked to ESG. A framework is expected to be a fluid document, it will flex to align with the future strategy of the organisation, new industry standards and potential regulation as and when it emerges. Bromford has managed to strike a great balance with its framework. Not only does it meet the disclosure requirements expected by the market, it communicates a story original to the organisation, reflective of why they are so well regarded with investors."  

Balfour Beatty, advised by Newbridge Advisors LLP, has announced that it has been appointed as preferred bidder by Royal Holloway, University of London, for the development of a student village at Rusham Park in Egham, Surrey. In partnership with Royal Holloway under a fifty-year concession contract, Balfour Beatty will design, build, finance and operate, alongside Student Living by Sodexo, a new 1,400 room student village at Rusham Park. In addition, the company will operate the existing 621-bed George Eliot student accommodation complex in London. Balfour Beatty Investments will invest 85% of the equity to finance the project with Royal Holloway investing the remaining 15%. Bringing together expertise from across the Group, Balfour Beatty’s UK Construction Services business will be responsible for the construction of the new student village at Rusham Park. As part of the c.£130 million design and build phase, Balfour Beatty will deploy modern construction methods such as the offsite manufacturing of the external walls, floors and bathroom pods, to improve health and safety and reduce the overall project duration. To support Balfour Beatty and Royal Holloway in achieving their bold and ambitious net-zero carbon targets, energy efficient systems, such as air source heat pump technology, will be deployed throughout the build. On completion, the project will form a critical part of the University’s plan to provide affordable but high-quality living, social and amenity spaces for its growing student population. Ion Appuhamy, Managing Director of Balfour Beatty Investments, said: “We are delighted to be appointed as preferred bidder and to work in partnership with Royal Holloway. Our appointment to deliver the student village development at Rusham Park demonstrates our ongoing success in the student accommodation market. “We are well-placed to support Royal Holloway with their ambitions, providing an integrated design, build, finance and operations offering which will ensure the seamless delivery of this essential and sustainable project.” Michael Berry, Director of Estates for Royal Holloway, University of London, added: “We are very pleased to be able to announce Balfour Beatty as our preferred bidder for the development of the Rusham Park student village. “Our goal is to continue to evolve our campus, developing the services and facilities we offer in order to enhance the student experience and create the optimum environment for student success.” With financial close anticipated in early 2022, construction is due to commence shortly thereafter with completion scheduled ahead of the 2024/25 academic year.

Newbridge advised Chelmer Housing Partnership (“CHP”) tap its existing 4.750% Dec-2043 bond by £50m. Established in 2002 to deliver its core social purpose of meeting housing need by providing homes for rent and sale, the Essex based housing association owns or manages over 10,500 homes and provides services for over 25,000 customers. The tap was sold at a significant premium to par resulting in CHP receiving an additional circa £19m to invest versus security pledged against the borrowing. Proceeds will be used to support the delivery of 500 much needed affordable homes across the eastern region. Following a competitive tender exercise, CHP appointed a single bookrunner (Barclays) to explore funding options. Paul Edwards, Deputy Chief Executive and Chief Financial Officer said: “We’re thrilled with this result, as the financing will enable us to continue with our ambitious commitment to deliver 365 new homes a year. “As we recover from the coronavirus pandemic it’s never been more important to address the shortfall of affordable housing in our region, and we have bold plans for the future. We will continue to invest wisely so we can play our part in providing great quality homes that people can feel proud to live in.” Chris Evans, Director at Newbridge Advisors commented: “It is a tremendous outcome and this important financing milestone supports the underlying mission at CHP of transforming lives. Increasing the size of the bond to £250m improves its liquidity, a key factor for driving down the cost of future capital market activity.”

A new partnership has been formed to help housing providers and companies across the built environment deliver on the environmental, social and governance (ESG) agenda. Communications agency, Social and corporate finance advisory firm, Newbridge Advisors have come together to support organisations with their ESG reporting and storytelling. As the ESG and sustainability agendas move further into the mainstream in the financial sector, housing associations and companies are increasingly required to demonstrate their environmental and social performance. Having recognised their compatibility, shared values and objectives, based around delivering high quality services and advisory to housing associations of all sizes across Great Britain, Social and Newbridge will offer clients an end-to-end service. Social’s expertise lies in communications, and its specialist division, Social Invest, will provide strategic and practical support on the formation and delivery of ESG communication plans, reports, presentations and other materials. Newbridge, which already provides investor relations services to several housing associations, offers technical advisory support around ESG frameworks and financial modelling, as well as investor relations services. Whilst ESG primarily provides funders with a measurable and comparable way to assess performance and material risks relating to sustainability, it is also a powerful way of channelling and communicating what matters to an organisation to a wider audience. Luke Cross, director at Social Invest, and former editor of Social Housing magazine, says: “Many people across housing say the sector doesn’t always tell its story as well as it could. ESG is an opportunity to do just that. We hope to support the sector in helping housing providers strike the right chord with the right people. Along with embracing a standardised sector-wide reporting approach, every housing association has its own story to tell, and it’s critical that it does this well when engaging with funders and other key stakeholders.” Chris Evans, director at Newbridge Advisors, says: “So many housing associations have such a positive story to share in relation to ESG, structuring the communication in a format recognised by the financing community is the next stage in bringing the two together. “It has never been more important to describe how proceeds will be used when arranging new funding.” The partnership aims to simplify and smooth out the process for HAs, connecting strategy with technical support and communications. Luke adds: “Newbridge already has extensive expertise and knowledge in investor relations and ESG disclosure. By working together in this area, we’ll add value by aligning that expertise with specialist communications, offering a complete service that delivers value and desired outcomes.” The Newbridge partnership follows Social Invest’s appointment of Kim Goodall as a consultant. Kim spent eight years at what became Aberdeen Standard Investments, working across global ESG implementation and strategy. She also has a background in communications and marketing.  

Newbridge has once again supported the housing associations sector in an innovative deferred funding exercise, this time for Optivo, who successfully raised c£150 million for settlement in 18 months. The transaction helps de-risk the business plan and further supports Optivo’s core aspiration in providing much needed social housing to its community. With a strong short-term liquidity position, bolstered further by securing access to the Covid Corporate Financing Facility (“CCFF”) in May this year, Optivo’s treasury strategy has focussed on longer term funding, particularly given the current favourable market conditions. Optivo have also undertaken extensive work on its credit positioning in recent months, alongside its newly revamped investor relations website and issuing its first ESG report and looked towards this transaction as a way to capitalise on the recent strong performance of Optivo’s credit spreads. The transaction structure offered three key benefits to Optivo: 1) The 18-month deferral, at a credit spread inside of its secondary curve, provided a significant cost of carry saving versus an immediately drawn bond issue 2) Increasing the size of the 2043 bond to “benchmark” (£250m plus), the liquidity in the secondary market should improve as a result of it becoming eligible to index funds 3) Raising £150m of proceeds against a nominal value of £100m, the secured transaction offers Optivo security charging efficiencies This excellent result demonstrates the strong positioning enjoyed by Optivo within the capital markets and reaffirms its long-term strategic plan is understood and supported by bondholders.

Newbridge were delighted to recently support Bromford with two deferred funding transactions in 2020. In July, Bromford finalised a £90m deal with a leading UK investor, at a record low coupon despite it being deferred for 18 months. The funding will be used to finance its ongoing housebuilding programme which aims to deliver 12,000 homes over the next eight years. It’s the latest in a string of successful funding transactions for the Midlands-based provider, and the second long-dated deferred deal Bromford have entered into since the onset of Covid-19. The deal follows the £100m private placement agreed with LGIM which will be drawn in May 2021 and brings its total funding activity in the last two years to over £1bn. Head of Treasury Imran Mubeen said: “We remain absolutely committed to our strategy of developing more homes to meet this country’s growing demand for social and affordable housing. We have continued to stress test our cashflow and business plan to reflect new Covid-19 scenarios, all of which confirmed that we require new funding in early 2022. “These deferred funding deals deliver certainty on the availability of future funding at record low rates and allow us to approach our future development objectives with confidence. We have long established several routes to market and have once again mobilised quickly to lock in our record low coupon with an established investor who endorse our business plan and the understand way we work." Grant Vaughan, a Partner at Newbridge Advisors who advised on the transaction said: “Once again Bromford have demonstrated how a nimble and proactive treasury strategy can yield fantastic results and de-risk the business plan. Taking advantage of the current market conditions has locked in significant value for the group.”  

Newbridge is pleased to welcome Chris Evans, who has joined as a Director from the DCM team at Lloyds Bank.

Newbridge is delighted to have been appointed to the Crown Commercial Service (or CCS) - Corporate Financial Services Framework Two (RM6169) Lot-6 Corporate finance infrastructure. This offers the provision of advice to Government Departments, Local Authorities, NHS Trusts, Non-Departmental Public Bodies, Arm’s Length Bodies and Agencies, across England, Northern Ireland, Wales and Scotland.  

The I-4 Ultimate Project consists of the reconstruction, improvement, and addition of new express lanes to the I-4 in Florida. The shareholders, Skanska and John Laing, reached financial close on the $2bn project in 2014. The project is currently in construction and I-4 Mobility Partners and the Florida Department of Transportation agreed several amendments to optimize the delivery programme. On behalf of I-4 Mobility Partners, Newbridge developed a bespoke model to analyse multiple scenarios of the revised contract and complex timetable amendments and provided analysis of the consequences.  

We are shocked and saddened by the recent passing of Jeremy Froud, a Partner at Newbridge Advisors. Our sincere condolences go out to Jeremy's family, friends and colleagues, he will be missed greatly. Jeremy was well known as a veteran of the UK bond markets having worked at Barclays for 28 years and built a world class UK bond business. His achievements are too many to list, but particular highlights would have been his role establishing the whole business securitisation structure for UK utilities and structuring the first UK corporate hybrid transaction. Jeremy was also incredibly well known in the social housing sector as someone who always delivered for his clients. During his time at Newbridge, Jeremy made an invaluable contribution to the team and the business. His kindness, generosity, unrivalled intelligence and quick wit is going to be missed by us all.