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Newlon raises £135m from private placement market
Case studies

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
 

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