Barclays Bank has announced two hedging deals worth £82m after a bumper fortnight of signings.
The agreements, with Paddington Churches Housing Association for £32m and Metropolitan Housing Trust for £50m, are designed to allow the associations to fix interest-rate payments for a number of years.

They follow a £60m deal with Acton Housing Association and a £20m agreement with Circle 33 (HT 4 June, page 12).

Hedging has become increasingly popular with finance directors who are taking advantage of current low interest rates.

Michelle Quinn, group treasury manager at Metropolitan, said: "MHT wanted an appropriately balanced mix between variable and fixed or hedged loans. The swap takes immediate effect for 30 years at significantly less than 5%. It can be cancelled at 10 years."

Selcuk Birler, finance treasury manager at Genesis Housing Group, Paddington Churches' parent group, said: "Genesis' loan portfolio will increase substantially over the next few years, therefore Genesis will continue to hedge its loan portfolio in accordance with its treasury strategy. The aim of the strategy is to maintain the interest payment volatility within certain limits."

Source

Housing Today