London assets company invests £75m in North East affordable housing

A London assets company has announced that it is providing £75m funding to a North East affordable housing provider.

LGIM Real Assets, part of Legal & General, is supporting Bernicia with £75m in long-term financing, which will help the housing association’s ambition to deliver 650 homes to the region by 2023.

LGIM said that the investment marks a “significant” milestone in its commitment to the North East.

Centrus acted as sole financial advisor to Bernicia, while Trowers and Hamlins acted for Bernicia on the legal aspects underpinning the deal.

Steve Bolton, head of private corporate debt in Europe, commented: “Whilst we have seen a lot of change over the past few months, the fundamental need for good quality, affordable homes has not changed.

“If Covid has shown us anything, it’s that we all need a safe place to call home. Covid, and the actions taken to mitigate its spread, highlight the central role of the home in people’s lives.

“Legal & General is uniquely placed to invest annuity money into the UK economy, supporting its long-term pension commitments and creating real assets which provide jobs, housing, productivity and wage growth.

“This £75m investment in Bernicia marks another significant milestone for Legal & General’s investment in the North East, having recently committed £100m and £350m to landmark regeneration projects in Sunderland and Newcastle respectively.”

Janette Longstaff, Bernicia’s executive director of finance, said: “This important investment from Legal & General Investment Management – as the sole investor in the deal - represents a huge vote of confidence in Bernicia’s financial strength as well as the wider North East economy.

“It allows us to secure long-term funding at very favourable rates thanks to our strong financial standing and excellent governance.

“The funds, which will be provided in three drawdowns over a two-year period, allow us to not only meet our corporate strategic objectives, but to go much further enabling us to explore strategic opportunities with our local authority partners, support local supply chains and create more opportunities for the people of the North East.”

Centrus acted as sole financial advisor to Bernicia, while Trowers and Hamlins acted for Bernicia on the legal aspects underpinning the deal.

Sam Goldman, director at Centrus, added: “We are delighted to support Bernicia on this landmark transaction, representing the fundamental strength of their business, long-term strategy and their position in and support for the North East.

“The structure provides cost effective deferred funding, with flexible covenants, a foundation that further supports Bernicia in achieving its long-term strategy.”