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£35 million loan for investment in affordable and social housing

 £35 million loan for investment in affordable and social housing

Affordable housing at Llais Tawe in SwanseaA £35 million development loan recently secured by Gwalia through private placement will us to invest in affordable and social housing projects across south Wales.

The development loan from Pension Insurance Corporation (PIC) was arranged with assistance from Lloyds Bank PLC and will see us receiving an initial sum of £25 million, followed by a further £10 million in 2014. These funds will enable us to provide up to 850 units of affordable housing and assist in Welsh Government’s target of providing 7,500 affordable homes by 2015. Our property portfolio includes rented stock, student accommodation, nursing & residential care homes, commercial units and shared ownership properties.

PIC has almost £9 billion in assets primarily invested in investment grade corporate bonds, UK government debt and cash, which back payments to its 80,000 pensioners. Housing association and infrastructure debt is playing an increasing role in helping the company diversify its asset portfolio.  PIC’s 40 year loan to Gwalia is matched to its pension payments over that period.

Allen Twyning, Investment Manager from the Pension Insurance Corporation said: “We are looking to match our liabilities with high quality long-dated assets. This loan fits that criteria and provides secured stable cashflows over the next 40 years.” 

Our Chief Executive Michael Williams believes housing associations have a social responsibility to make existing assets work to support growth: “We believe this is the first investment deal of its kind by a Welsh Housing Association. Hopefully it will pave the way for further deals by Gwalia and other Welsh Housing Associations to ensure the sector can fund new housing in line with Welsh Government targets”.

Our Interim Executive Director of Finance, Jim Lashmar commented: “This is a market that is set to grow for medium and smaller organisations where private placements can represent a good deal and Gwalia has demonstrated that competitive rates can be achieved”