A west country registered social landlord has saved £5m in a £175m refinancing deal.
South Somerset Homes borrowed £100m from building society Nationwide to buy back a £67m bond it issued in 1999 and refinance an associated £15m loan facility.

It is unusual for a registered social landlord to buy back bond issues of such a large value.

The bonds were set up by BNP Paribas, whose social housing business was bought by Nationwide in 2002/3.

South Somerset Homes also borrowed a further £75m from Nationwide to fund development and other activities.

Finance director Caroline Moore said: "We had a fixed bond and we wanted to have a mix of fixed and floating and also the bond structure did not really allow us to use cash reserves for development. The new facility is far more flexible."

The association is undertaking the large-scale redevelopment of a number of estates that contain pre-reinforced concrete homes and garage sites and cross-subsidising the construction of social housing with sales of homes.

The adviser on the deal was Trade Risks, a bond and derivatives specialist firm, and Norton Rose, the City law firm.

Source

Housing Today