Legal & General : L&G Completes 40 Year Loan to North West Housing Association, Adactus

09 July 2014

Legal & General ("L&G") announces that it has agreed a £25 million, 40 year loan to Adactus Housing Group ("Adactus" / the "Group"), signaling its sixth direct investment deal in the social housing sector. Having invested c.£500 million in social housing in just over 18 months, through five loans and one equity deal, this continues to form an important part of L&G's wider investment in UK housing and infrastructure.

The loan is secured against a portfolio of existing assets and will be used to refinance an existing short term loan, which is maturing this year, as well as to provide Adactus with further capital to support its development pipeline. Building off a strong operational base, its on-going development programme is set to deliver 1,500 units by 2018. As well as delivering much needed quality affordable housing, the wider benefits are reflected by their 2011-2013 programme of 548 homes both supporting 1,127 jobs and having a £48.5m impact on the local economy.

Adactus is a regional housing association that is active across 21 local authority areas in the North West of England, with roots dating back to 1964. Today the Group owns and manages over 13,000 units, employs close to 600 staff and has an annual turnover in excess of £55m. It is one of the largest associations in its region.

Alex Gipson, Lending Manager at Legal & General, said:  "It was obviously important to us that Adactus had a clear business model and strong financial footing. What's more, what excited us about working with them was the clear sense that merely maintaining the status quo was not an option to the board and executive team. From discussions it is clear that seeking continuous improvements in every area of their business is part of their DNA."

Paul Chisnell, Group Director of Finance at Adactus Housing Group, commented:  "As we look to continue to deliver much needed development, we have diversified our funding sources and this loan reflects a significant step forward for us. This is not purely a financial transaction but a commencement of a partnership between two organisations with a shared vision for bringing about real improvements to the UK's housing market."

Laura Mason, Director of Direct Investments at Legal & General Capital, said:  "Supporting the UK's housing needs up and down the country, this loan forms an important part of L&G's wider commitment to UK infrastructure and housing. Indeed, with a total of over £4bn in direct investments in the UK, we are one of six large UK insurers that have pledged to invest £25 billion in UK infrastructure by 2018."
This deal closes only a week after L&G announced a £40million, 20 year debt facility to Rooftop Housing Group.  Other recent social housing deals concluded by L&G have included a £50 million, 40 year debt facility to Housing Solutions, a £102 million, 15 year debt facility to The Hyde Group and a £40 million, 25 year debt facility to Thames Valley Housing Association. It also recently secured a portfolio of over 4,000 housing units, let to Places for People on a new 50 year lease, for £252 million.

Adactus was advised by Edmond de Rothschild Corporate Finance, London.  The legal firm acting for Adactus was Trowers and Hamlins LLP, whilst Pinsent Masons advised L&G.

*National Housing Federation's analysis of Centre for Economic and Business Research (CEBR) Economic Impact Database 2013

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