Hillcrest Homes

Raising £50m with highly competitive terms in uncertain market conditions

Hillcrest Homes engaged ATFS to advise on a funding strategy to deliver the largest development programme in the association’s history. Critical to future delivery is the securing of a £50m 25-year funding facility at very competitive rates, provided by long-term funding partner RBS.

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About the project

In 2018 Hillcrest raised £70m via a Private Placement, which has supported their growth to date. This latest tranche of £50m new funding provides Hillcrest with the level of committed funding availability it requires to continue its ambitious development programme. This will also ensure that its rents remain affordable.

ATFS reviewed Hillcrest’s business plan and funding requirements, establishing key objectives, assessing available options for raising new finance and recommending a strategy for implementation. After providing the initial strategic advice to Hillcrest, and working with RBS and Hillcrest’s legal advisers Thorntons, we provided the following support through to successful completion:

  • Support and advice to Hillcrest’s SMT/Board on funding options and process to facilitate decision making.
  • Advice on the optimum structure to balance pricing, key terms and conditions and cost of carry on funds committed but not needed
  • Support and advice during negotiation of the critical commercial terms and conditions of loan documentation.

Results

The project outcome was successful delivery in challenging market conditions of a 25-year £50m bi-lateral loan from RBS. This recently released product from RBS will be split into two £25m tranches of fixed and variable rate money. Despite the uncertainties continuing to face clients, successful conclusion of this transaction in 6 months and through lockdown confirms that housing associations continue to be an attractive proposition to lenders and that there is long-term funding appetite.

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