Aviva Investors has entered into a €65.8m (£60m) private corporate debt facility with Coastal Housing Group, a not-for-profit housing association with 6,000 homes under management across South Wales on behalf of the Aviva UK Life annuity business. The investment in the 30-year debt facility is part of Aviva Investors’ strategy of investing in long-dated secured investments that seek to provide illiquidity premium and enhance risk-adjusted returns to its investors. Coastal will use the proceeds from the financing, the largest it has undertaken to date, to secure its long-term business plans by expanding its operations and delivering additional housing across a range of tenures.
Munawer Shafi, Head of Structured and Private Debt at Aviva Investors, said: “This transaction demonstrates our ability to structure bespoke funding solutions, aligned to counterparty businesses and investors’ needs. The counter-cyclical nature of social housing, coupled with high relative value and a strong regulatory underpinning, make it an attractive sector in the current environment. This deal fits well with our strategy of investing in long-dated predictable cash flows, which aim to offer attractive risk-adjusted returns to our investors.”
Ashish Dafria, Chief Investment Officer, Aviva UK Life, said: “As a business with a significant focus on ESG, we are particularly keen to pair our investment needs with projects that demonstrate social and environmental benefits. The social housing sector has become increasingly attractive to investors such as Aviva, where the certainty of cash flows to meet liabilities is of paramount importance, while also recognising the increased need for affordable homes provision in local communities. Coastal has a strong track record in regeneration work and we are pleased to be providing financing to the business. We look forward to supporting its ambitions in the sector.”