Stonewater raises £100m new funding

Stonewater has secured £100m in new funding following a restructure to help it build 6,000 affordable homes over the next four years.

The 33,000-home housing provider has borrowed £75m from SMBC and £25m from existing lender, Nationwide.

The funding from new partner SMBC, is linked to sustainability performance so a lower interest rate will apply if Stonewater hits targets relating to decarbonisation.

Stonewater’s ESG annual targets include planting 3,000 trees, upgrading 350 properties to EPC level C or equivalent and installing 200 low carbon heating systems.

The company restructure consolidates the number of Stonewater businesses from five to three.

The previous structure was a legacy of the merger in 2015 that created Stonewater. This new approach maximises the financial capacity to deliver the planned investment in existing and also new homes.

The benefit of the new structure was recognised by the Regulator of Social Housing in its recent In-Depth Assessment, following which it reaffirmed Stonewater as having the top G1 and V1 ratings for governance and financial viability.

‘All five registered providers divisions had assets and loans with a combination of lenders and this was good for flexibility at that time,’ said director of corporate finance, Anne Costain.

‘However, we always knew that this would not remain the best structure due to its complexity. Also, some of the bank covenants and the conditions set by the individual banks we could borrow the money under were starting to restrict our potential. It was the right time to address this by restructuring and now allows us to present a clearer picture to investors and access funding more efficiently,’ she added.

‘We are really pleased to have worked with our advisers and partners to complete this process over the past six months. It is an important moment for Stonewater to agree our second ESG-linked loan, the first with SMBC. We are also very happy to be able to continue our long-standing relationship with Nationwide.’

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