Press Releases
- Barclays Bank Finance Deal -
01 February 2007
North Hertfordshire Homes have brokered an innovative financial deal with Barclays bank which will save them an estimated £10 million off their business plan over the next 15 years.
The association has negotiated to borrow £25 million at a fixed rate below 4.6% for 20 years with the bank having the option to cancel the arrangement at two fixed points in the latter years. The balance of the £40 million debt (£15 million) will be borrowed at a fixed rate below 4.9% for fifteen years.
“This is a significant cost reduction in relation to our business plan in which LIBOR floating debt was based on 4.0% real interest rates plus inflation of 2.5%, which is 6.5% annual cost to service floating loan debt. While in reality we could yet lose out in the long term if the future rates were to fall below the ISDA fixes, we have nevertheless been able to reduce our loan debt modelled in our business plan by approximately £10 million, by 2021” says Brian Milward, NHH Finance Director.
“This is a tremendous deal for us and the predicted savings will allow us to incorporate a bigger building programme into our business plan. We estimate the £10 million saving is the equivalent of 100 new homes a year, allowing us to provide even more affordable homes for those most in need of low cost housing” commented Kevin Thompson, Chief Executive of North Hertfordshire Homes.
“Barclays is delighted to be involved in this deal with NHH which will provide the association with a strong platform to exceed their own exciting development targets” says Craig Wilson, Relationship Director, Barclays Bank.
NHH has already joined forces with three other housing associations to float a £263 million bond under the Harbour Funding umbrella. Its share is £83 million. By working together the associations have secured average rates of 5%. The deal with Barclay’s is yet another example of how NHH is pushing the boundaries of innovative thinking in the management and provision of social housing.
Note to Editors:
1. North Hertfordshire Homes is a Registered Social Landlord, set up in April 2003 to take ownership of North Hertfordshire District Council’s housing stock.
2. NHH owns and manages approximately 8,500 homes across northern Hertfordshire – from Royston to Wheathampstead.
3. NHH plans to provide around 500 new affordable homes across Hertfordshire over the next four years.
4. Contact Sally Bailey (Tel: 01462 705491 or email sally.bailey@nhh.co.uk) for further details.
