Social impact fund Funding Affordable Homes (FAH) has completed a £56m debt refinancing with a European bank.
The fund said the new 20-year facility, which replaces nine existing facilities provided by three lenders, including Barclays and Secure Trust Bank, will reduce its interest payments by more than half.
The interest rate on the new facility is based on an inflation-linked gilt rate, aligned with FAH’s inflation-linked rents. Centrus acted as advisor and arranger to FAH on the refinancing.
FAH, which relaunched in November 2022, is an Article 9 ‘dark green’ fund under EU SFDR classification. It typically provides forward funding to enable new properties to be built and managed by established registered providers of housing, but it also operates its own housing association Funding Affordable Homes Housing Association.
Adrian D’Enrico, fund manager of FAH, said: “This refinancing is a significant milestone for FAH, more than halving our cost of debt and providing a stable base from which to raise and deploy equity into delivering more homes. It reflects the increasing appetite from the banking and investor universe for affordable housing as an asset class. We now aim to raise further equity capital to enable the development of our significant pipeline of new opportunities, which will deliver much-needed homes across the UK”.
Lawrence Gill, director at Centrus, added: “We are pleased to have supported Funding Affordable Homes in arranging funding so key to its long-term strategy, supporting objectives to deliver more affordable homes and social impact. The successful outcome of this refinancing project has provided FAH with a strong foundation and greater flexibility in the future.”
