What’s the deal?

The £95m refinancing deal struck by Maidenhead and District Housing Association with RBC Capital Markets provides some interesting pointers for other post-transfer registered social landlords.

The 30-year term is normal, but what is unique in the lending market are the flexible performance targets and less stringent covenants that have been required by RBC.

This has given the Berkshire-based housing association much more scope for raising additional finance from other sources while providing more funding for development work, such as a three-year scheme to build 480 homes.

Ray Green, Maidenhead group finance director, also points out that the RSL is using a third less of its stock as security than under the arrangement it had with its previous lender. “All of our stock is held in a security trust deed. This separate entity means that our 3200 properties can be put up for security [for a loan] but not all have to be put up for one deal,” he explains.

John Shinton, director of RBC Capital Markets, said: “The deal gives Maidenhead a lot more flexibility in that they don’t have to stick to somewhat arbitrary performance targets.

“They have clearer, more achievable goals that mean they shouldn’t have to renegotiate over the rest of the life of the loan.”