Bromford raises £100m to fund new homes programme

The 44,000-home landlord has secured the funding from Legal & General at a historically low rate to help fund its ongoing housebuilding programme.

Wolverhampton-based Bromford aims to build more than 1,000 new homes in the current financial year and a further 11,000 by 2028. Following the coronavirus lockdown Bromford has begun a phased reopening of its construction sites, including those in Redditch, Burntwood and Oldbury and is on track to have all sites back by the end of June.

Imran Mubeen, head of treasury at Bromford, said: “We have taken a pro-active approach right across the business to managing the challenges and opportunities arising from Covid-19. We have now resumed development and look forward to delivering more homes and core services at a time our communities and families rely upon us more than ever.

“We already benefitted from access to over half a billion pounds of cash and available loans, and our business plan is agile and able to manage any new scenarios. Whilst we had no immediate requirement for new funding we have agreed this deal now to lock-in the exceptionally low rates in the market whilst arranging to draw the funding to build new homes in 2021. Ultimately, the more money we save on funding, the more money we can re-invest in building more homes and delivering more of our core services to the communities we serve.

“It is important that we work with funders and investors who understand our long-term strategic plan and growth agenda, and we are delighted to extend our partnership with Legal and General who continue to support our journey and appreciate the way we work.”

Steve Bolton, head of private corporate debt, Europe, said: “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 new jobs, housing, productivity and wage growth. We have a role to play in supporting the UK through the Covid-19 crisis and this latest investment is testament to that support.

“Our investment in Bromford matches our extended liabilities and delivers both real economic growth and social value for the UK. We’ve seen lots of change in the past few months but the fundamental need for good quality homes remains a constant. There is an urgent need to provide stable homes for millions of households on waiting lists, and partnerships like this will help deliver on that need.”

NatWest Markets acted as sole agent in Bromford’s private placement issuance, with Newbridge providing treasury advice. Legal advice was provided by Trowers & Hamlins and Addleshaw Goddard.

George Flynn, vice president at NatWest Markets, said: “We are delighted to once again partner with Bromford on this successful £100m long dated, delay draw transaction. Through working closely with L&G and Bromford we were able to structure a flexible and competitively priced transaction to support Bromford’s long term strategic plan and growth agenda in order to deliver much needed affordable housing. This also demonstrates the continued support of long term investors for the social housing sector.”

It brings Bromford’s total funding to £650m raised in the past two years, adding to its £300m debt public bond in 2018, £150m of previous private placements, and £100m revolving credit facility with Lloyds Bank. The housing association also received £66m in funding to invest in new homes when it became one of Homes England’s strategic partners in 2019.