Hightown has secured £100 million of funding from the Affordable Homes Guarantee Scheme (AHGS).
The association will use £60 million to invest in 250 new affordable homes and the remaining £40 million for improvement and decarbonisation works to existing homes.
The funding comprises two £50 million loan facilities from the sale of bonds issued under the AHGS’s 2036 and 2041 Bond Series, with interest rates of 5.159% and 5.516% respectively, providing cost-effective mid-term and longer-term financing tailored to Hightown’s strategic plans.
Launched in 2020, the AHGS bond issuance programme is backed by a guarantee from the UK Government and offers fixed-rate loans of up to 30 years to the social housing sector. From March 2024, registered providers were able to use the scheme to invest in property improvements in addition to funding new affordable homes.
Hightown worked with Venn Partners - the investment manager appointed by the UK Government - Savills Financial Consultants and property law firm Winckworth Sherwood to complete the transaction.
Maxine Espley MBE, Hightown Chief Executive, commented:
“We are pleased to secure this cost-effective funding, which will allow us to continue to fulfil our strategic ambitions to deliver much-needed affordable homes in our key operating areas and to improve our existing homes to make them more energy efficient, comfortable and affordable for our customers.
“We are grateful to our advisors and the team at Venn in offering us a bespoke and flexible approach, ensuring we optimised the process and achieved a competitive all in funding rate inside our business plan assumed rates. The structure of the facility across two tranches enables us to spread our refinancing risk effectively.”
Oriane Auzanneau, Deputy Portfolio Manager for AHGS and Managing Director at Venn, commented:
“We are delighted to close this transaction with Hightown and support them with the delivery of much needed new affordable homes in their local areas as well as continuing to invest to improve their existing homes.”
