Aberdeen Standard Investments (ASI) private placement team has lent €58.4m (£50m) to A2Dominion Housing Group, a UK social housing landlord, to help grow its development opportunities and strengthen liquidity. Aberdeen Standard Investments said the funding was provided on behalf of its strategic partner Phoenix Group and will provide it with a reliable income stream until 2045, helping to meet future liabilities. The loan is secured against social housing assets, includes a deferred settlement feature to March 2020 and fully amortises over the last 10 years, resulting in a weighted average life of 20 years.
ASI has a long track record of investing in the UK social housing sector. This was the first housing private placement investment for Phoenix Group, which is keen to explore further funding opportunities in the sector.
Fiona Dickinson, Investment Director at Aberdeen Standard Investments, commented: “Our insurance and pension fund clients continue to look for cash flows over the long-term which are secured against UK social housing. A2Dominion’s strong credit rating, which is higher than the average rating in the sector, is attractive to clients. The bilateral approach in negotiating this privately placed investment helped to reduce the execution risk that’s associated with public bonds, given the level of uncertainty in the GBP market at present.”
Scott Robertson, Phoenix Group’s Head of Financial Management Group, added: “We are delighted to be supporting A2Dominion’s strategic plans to deliver more homes in Southern England. Phoenix was able to work closely with our strategic partner, Aberdeen Standard Investments, to deliver a bespoke transaction which works well for both parties.”