Hightown’s £100m Unsecured Green Private Placement funds new affordable and energy efficient homes

The first time we’ve seen US and Canadian Private Placement investors come together with UK Infrastructure funds to collectively invest in a Housing Association, including an investor new to the Social Housing Private Placement market.

Hightown

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Building homes and supporting people

Hightown is a charitable housing association, which aims to help people who need support and care, or who cannot afford to buy or rent a home at market values. Operating in Hertfordshire, Bedfordshire, Buckinghamshire and Berkshire, Hightown currently manages over 7,300 homes and provides care and supported housing services for a wide range of people.

As one of the fastest-growing housing associations, Hightown has made it its mission to deliver affordable housing that will contribute to ending homelessness, and as such will add 1,000 homes to its existing portfolio over the next two years. The impact of the not-for-profit organisation extends, however, beyond being a housing developer and landlord: through its resident involvement activities it ensures that the voices of their tenants are heard and that their needs are embedded into services that directly contribute towards their quality of life. At the same time, Hightown’s care and supported housing (C&SH) schemes enhance the lives of service users, helping them gain independence and take control, so they can enjoy the same opportunities as others.

Furthermore, Hightown is also committed to reducing its impact on the environment and contributing towards Net Zero by 2050 through increasing the energy efficiency of its homes and using sustainable construction methods.

Hightown impresses with strong sustainability and impact credentials

In order to fund the development of new homes and improve the energy efficiency of its existing housing stock, Hightown Housing Association sought funding via a Green Private Placement and turned to NatWest to support in the role of sole Private Placement agent and sole ESG structuring bank.

In preparation for the transaction, the NatWest team worked closely with Hightown to establish a Green Loan Framework, which aligns with the four pillars of the LMA Green Loan Principles and the UN Sustainable Development Goals (SDGs) #7 ‘Affordable and Clean Energy’, #9 ‘Industry, Innovation and Infrastructure’, #11 ‘Sustainable Cities and Communities’ and #13 ‘Climate Action’, outlining a range of projects Hightown will finance with the capital it borrows through green loans.

Hightown publishes an annual Social Impact Report showcasing, its strong EPC credentials (99% of its homes have an EPC rating of C or higher) and targeted strategies to prevent homelessness as well as deliver positive outcomes in C&SH. Hightown is also a founding member of Homes for Cathy, a group of housing associations and homelessness charities united by an aim to end homelessness.

The transaction attracted strong investor interest and was more than three times oversubscribed, enabling Hightown to agree a £100m Unsecured Green Private Placement across 12-15 year maturities with five investors; all of them new to Hightown, and one new to the sector.

Speaking about the issuance, David Bogle, Chief Executive of Hightown Housing Association, said: “This £100m Green Private Placement, borrowed on an unsecured basis, adds a welcome degree of flexibility to the funding of our development programme. The funds will be used to deliver affordable homes with high levels of energy efficiency in our core areas of Hertfordshire, Bedfordshire and Buckinghamshire where there is substantial need and demand. We are pleased to have been able to satisfy the investors both on the solidity of our current operations and also on our plans for delivering social impact and sustainable homes in the future.”

David Skinner, Director of Financial Services, Hightown Housing Association, added: “We are very pleased to have completed this deal. The timetable for delivery was tight and the work involved was quite intense. The pricing was very competitive and investor interest was strong. Thank you to NatWest for the excellent teamwork, ESG expertise and overall support every step of the way.”

Sonia Gadhia, Director, Private Placements at NatWest, commented: “This is the first time that I have seen US and Canadian Private Placement investors come together with UK Infrastructure funds to collectively invest in a Housing Association, including an investor new to the Social Housing Private Placement market. It’s great to see the increasing interest in this sector across a diverse set of investors and to see that more investors are open to looking at unsecured issuance. I am delighted to be part of this important milestone for Hightown, which will be critical in enabling them to develop more affordable, energy efficient homes.”

George Flynn, Debt & Financing Solutions, NatWest, noted: “The level of oversubscription and flexibility this transaction achieved is testament to the strength of Hightown’s offering to market and management’s work on the roadshow and subsequent investor Q&A. The Green Loan Framework showcases Hightown’s modern and energy-efficient portfolio and strong ESG credentials and provides a great platform for Hightown to attract further unsecured issuance in the future.”

Dr Arthur Krebbers, Head of Sustainable Finance Corporates, NatWest, remarked: “Our work with Hightown demonstrates NatWest’s continued support for the Housing Association sector and reflects the essence of NatWest Group’s purpose-led strategy: to deliver long-term sustainable performance and accelerate social value in areas where we can make a meaningful contribution as a bank.”

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