Lawrence Graham in biggest ever housing group investment
Investment
October 06, 2000 at 08:03 PM
2 minute read
Lawrence Graham has advised the Flagship Group on a £292.4m financing and restructuring deal – the biggest single investment in a housing group to date.
Banking partner Nicholas Turner and property partner David Hayward led the team advising the group, which is mostly comprised of two housing association subsidiaries; Norfolk-based Peddars Way and Suffolk Heritage.
The firm was able to win the work because of its long-term relationship advising Peddars Way.
The innovative deal also involved a team from Allen & Overy, led by banking partner Stephen Kensell and property partner Adam Cleal, which advised the syndicate of banks that provided the finance.
The syndicate was led by NatWest and included Nationwide Syndications, Halifax and National Treasury Services.
Funds were raised from both the debt and capital markets. They will enable the group to pay off £200m of existing debt.
The syndicate raised £211m, and £81.4m was raised through a capital markets facility, which will be refinanced later through a bond issue. This effectively securitises a large proportion of the association's property assets.
The existing debt has already been paid off and over £60m is now available to the group to finance wider ambitions, including plans to build 2,000 new houses.
Turner said optimum borrowing had been achieved because the group's subsidiaries had mortgaged their assets jointly and used them as collateral to borrow more from the syndicate.
Hayward added: "What was novel about this deal was the sheer size of it. We were dealing with the assets of both associations totalling 13,000 properties, and had over 140 boxes of titles to properties to sort through."
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