Newlon raises £135m from private placement market
Background
- Newlon is a mid-sized housing association with a significant development programme, looking to fund long-term development aspirations
- Funding was to be drawn in multiple tranches – £55m at the time and the balance deferred
- The borrower had approached the private placement market in 2012 and wanted to follow the 2012 terms and conditions
Our Approach
- JCRA reviewed the business plan to understand the funding requirements and any potential impact on Moody’s rating
- Agreed with Newlon an approach to investors, focusing on engaging with new US investors
- Prepared a detailed tender document and approached six arrangers
- Assisted in the preparation of the investor presentation
- Ensured chosen arranger remained focused on US investor pool
Benefits
- Raised £135m after the initial book was 4x over-subscribed
- Achieved bids from a number of North American investors – including first-time investors
- Average cost of debt was 3.34%, against a public deal of at least 3.45%
- Funding was in two tranches, with the deferred tranche priced at the forward gilt and no extra premium
- Terms of the deal followed the existing 2012 Note Purchase Agreement
