Pension Insurance Corporation plc (‘PIC’), a specialist insurer of defined benefit pension schemes, has completed a £130 million debt investment with Raven Housing Trust (‘Raven’), which will be used to finance the development of 630 homes by 2026. 58% of the homes will be for social or affordable rent and 30% will be for Shared Ownership accommodation.
PIC was chosen as sole lender following a full market tender due to its flexibility on maturity and deferral capabilities. PIC has invested £3.3 billion in social housing across the UK since 2012.
Raven is a not for profit Registered Provider of Social Housing that invests in homes across Surrey and Sussex. Raven currently owns and manages 7,117 properties across ten Local Authority areas in the South East of England.
Key points of the transaction:
- Range of maturities spanning over 30 years
- Maturity profile tailored to match PIC’s pension liabilities in years where it is difficult to source cash flows in the public bond markets • Deferred drawdown, reducing the cost of carry for the borrower
- The debt is secured on housing assets
Mark Baker, Group Executive Director of Finance at Raven Housing Trust, said: “PIC’s investment with Raven will help hundreds of families find much needed accommodation. We operate in an area of high demand, with high average house prices, and high house-price growth. There are approximately 1,250 households currently on the waiting list for social housing in Reigate and Banstead, which is our largest Local Authority area. For shared ownership schemes, Raven typically receives 3 – 4 candidates per plot. We’re delighted to have completed this transaction with PIC, who are very experienced in helping housing associations achieve their goals, and were flexible in closing the transaction.”
Vladan Martinovic, Debt Origination Manager at PIC, said: “The purpose of PIC is to pay the pensions of our policyholders over many decades, so by continuing to invest in long-dated, secure cashflows, such as our Raven investment, we are securely backing future pension liabilities. It has been a pleasure to deal with the team at Raven. We are proud to be able to help them develop much-needed homes, whilst at the same time securing the pensions of our policyholders.”
