Market Update Social Housing | January 2022 - Centrus ...
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Market Update
Social Housing | January 2022
TREASURY & DERIVATIVES | CAPITAL RAISING | FINANCIAL PLANNING & STRATEGY | ASSET FINANCE
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Introduction
And so, as the “Have I Got News For You” Twitter feed puts it, we begin the third attempt at 2020 … hopefully this time we’ll get past February
half term without any major screw up. The obvious challenges are pretty familiar by now: Covid variants, inflation concerns, or maybe vice versa
… Foremost amongst a series of geopolitical concerns is either the ongoing wrestling between the US and China or Putin’s latest attempt to
stave off Western influences by threatening to invade Russia’s neighbours.
Some uncertainties are always going to fall into the “difficult to hedge” category. But in terms of risks which we can do something about, there are
concerns with more known unknowns where there remains plenty of work to do. Treasury concerns for most housing associations boil down to
choices around the level, tenor, and extent of rate-fixing within financing arrangements. In 2021 we saw a lot of long-term fixed-rate institutional
funding; this was appropriate and prudent in our view. Most housing association treasurers rightly see themselves as running a pretty predictable
ship in terms of long-term borrowing requirements.
That will likely continue and on the ‘spend’ side of the equation we should see in 2022 continued if slow progress in nailing down the net cost
profile of fire safety spending to correct past mistakes, for those housing associations materially affected. The fire safety story is to some extent a
policy story now and 2022 may also see more tangible changes on the town planning front, depending on where Michael Gove lands on the
politics of delivering housing vs. detailed local accountability.
The other big asset management story – decarbonisation – is a more global matter. It will no doubt remain a high-profile topic. In a slightly
ominous start to the year, both the last day of 2021 and the first day of 2022 were the hottest on record in the UK – the high point of 16.5 degrees
on 31st December and 16.3 on 1st January were both the highest ever recorded, with records going back more than a hundred years. It seems
unlikely that this or in fairness any other government will set out in tablets of stone the way forward in this complex area, there are so many
moving parts, but stakeholders’ expectations of a clear strategy of a charitable and heavily-taxpayer-funded sector owning more than 10% of the
country’s residential property will only rise over time. It remains important to continue to build on the thinking and good work already being done.
Kurt Vonnegut observed that “In real life, … people don’t change, don’t learn anything from their mistakes, and don’t apologize.” He reckoned
that in a short story the characters needed to do at least two out of three; writing fiction therefore needs to balance reality and fantasy. I reckon
one out of three is a reasonable personal target and given advancing age I will rule out meaningful personality change, which leaves me needing
to learn from my mistakes or at least apologise for them. Doesn’t sound so difficult when you write it down. That’ll do as a New Year’s Resolution,
wish me luck!
And in similar vein, I and all the Centrus team look forward to working with all our clients in the friendly and professional manner we are
accustomed to, supporting decisions and implementation from the day-to-day to the most strategic – and we wish you all the best of fortunes for
2022.
2
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Financial Markets & Economic Overview
The rate of inflation is forecasted to rise to 6% in April, while BOE, ECB and The Federal Reserve announce interest rate rises in the future
Debt Market Benchmarks Last Close 1m Δ 3m Δ LTM Δ
▪ Inflation continues to remain high, expected to reach 6% by April 2022 and recent
statements amongst the BoE, ECB and the Fed indicates potential rate rises in the 1 Month LIBOR 0.19% +13 bps +14 bps +17 bps
Financial Markets Overview
coming year. 3 Month LIBOR 0.26% +17 bps +18 bps +24 bps
▪ The Bank of England raised the base interest rate from 0.1% to 0.25% in December 5 Year 6ML Swap 1.29% +10 bps +29 bps +110 bps
2021, the first rate rise in over three years. With inflation currently above 5% and
expected to reach 6% by April, gradual rises in interest rates could be plausible in 2022.
30 Year 6ML Swap 1.10% +23 bps -15 bps +53 bps
5 Year 1s6s LIBOR Basis 33 bps +12 bps +11 bps +16 bps
▪ The ECB, who over the last few months have pushed back on increasing interest rates
and argued inflation is transitory, have now signalled they will be ready for an interest 30 Year Gilt Yield 1.12% +27 bps -25 bps +36 bps
rate hike in early 2023, after ending the remaining bond purchase by the end of 2022.
iBoxx 15y+ A Coll. Spread 100 bps +0 bps +4 bps -6 bps
▪ The Federal Reserve is expected to begin raising interest rates as early as March 2022, iBoxx 15y+ AA Coll. Spread 99 bps -0 bps +4 bps -22 bps
and has signalled a three quarter point interest rate hike this year, amongst a robust US
economic rebound and surging inflation which it previously deemed transitory. iTraxx Bank 5y Senior CDS 55 bps -11 bps -2 bps -3 bps
Furthermore, officials commented on winding down their bond-purchase stimulus FTSE 100 7,385 +4.6% +4.2% +14.3%
programme at a faster rate, setting it on track to end in March 2022. The current
portfolio of Treasury and mortgage securities is $8.76 trillion. The discussion is likely to Bank of England Base Rate 0.25% +15 bps +15 bps +15 bps
be continued at the January 25th and 26th meeting.
Housing Dec-21 Nov-21 Oct-21 Sep-21
Nationwide HPI YoY 10.40% 10.00% 9.90% 10.00%
Halifax HPI YoY - 8.20% 8.10% 7.40%
▪ The yield on UK 10-year government bond extended gains above 1% in early January, Average UK House Price - - £268,349 £269,945
hitting its highest level since November 3rd, as a result of the Prime Minister Boris
Average UK House Price YoY - - 8.93% 10.76%
Johnson’s announcement that new measures were not needed now to fight the rapid
spread of coronavirus. The focus has shifted to tapering of central bank monetary
stimulus, after the Bank of England became the first major central bank to raise rates Inflation Nov-21 Oct-21 Sep-21 Aug-21
since the pandemic began due to a spike in inflation, announcing up to four rate hikes. RPI YoY 7.10% 6.00% 4.90% 4.80%
UK Macro
▪ The British pound held at $1.35 in early January 2022, the strongest in two months, CPI YoY 5.10% 4.20% 3.10% 3.20%
after seeing a one-year low of below $1.32 on December 20th as the UK government did
not impose further restrictions at the end of the year, and the BoE surprised investors Exchange Rates Last Close 1m Δ 3m Δ LTM Δ
by increasing interest rates from record low levels. In 2021, sterling had lost 1.1%
against the US dollar, with concerns about the UK’s economic recovery from the GBP/USD 1.353 +2.0% +0.5% -0.9%
pandemic exacerbated by a surge in energy prices, increase in Covid-19 cases, and
GBP/EUR 1.189 +1.4% +2.2% +6.4%
post-Brexit tensions.
▪ CPI inflation is now expected to peak at around 6% in April 2022, before falling back Commodities Last Close 1m Δ 3m Δ LTM Δ
materially from the second half of next year, as supply disruption eases, global demand
Brent Oil (US$) 78 +10.2% -0.9% +49.6%
rebalances, and energy prices stop rising.
Gold (US$) 1,826 +2.9% +3.8% -3.6%
Market data as of 31st December 2021
Source: Halifax, Markit, Nationwide, ONS, Refinitiv
3
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Recent Key Debt Transactions
Toward the end of 2021, the pace of transactions slowed down, but new issuances in the housing sector remain at considerably low rates
£280m Private £140m Private
Placement £250m New Issuance
Placement
Nov 2021 October 2021
October 2021
▪ Southern is one of the largest registered
▪ Sage Housing (a for profit RP), backed by US ▪ Magna Housing raised £140m of senior providers (RP) in the UK and a constituent
private equity giant Blackstone, raised the unsecured notes in its first USPP deal member of the G15 - the biggest RPs in
funds through a new social housing
London
securitisation and by gaining sustainable bond, ▪ The funding is split out across two tranches
social bond and green bond status, which is with the first for £80m & £20m (deferred for 2 ▪ Over 5,000 units planned for development or
overseen by the ICMA. years) both maturing in 30 years. Priced at acquisition by 2026
Gilts + 110 & 125 respectively
▪ The bond, which has an expected term of five ▪ New 15-yr issuance of £300m with £50m
years with extension options, was secured ▪ The second tranche was for £40m maturing in retained bond at a spread of 1.30% (coupon
against 1,712 properties. 35 years and priced at Gilts + 115 2.38%)
▪ Floating structure with a weighted average of ▪ Based in Dorchester Magna Housing provides
145 basis points over the Sterling Overnight services in Dorset and Somerset
Index Average (SONIA)
£125m Retained Bond £250m Public Bond £300m Public Bond
October 2021 September 2021 September 2021
▪ Accent Group sold £125m of retained 2049 ▪ Issued a £250m sustainability bond at a ▪ Clarion Housing Group has raised £300 million
bonds, with a coupon of 2.625% spread of 0.87% resulting in an all-in rate of in a 30-year sustainable bond issue. The 30
1.93% year bond was priced at a coupon of 1.87%
▪ The bonds were retained as part of the
group’s £350m issuance in July 2019 ▪ Platform is using the proceeds to finance or ▪ Follows the issuance of £350 million and £300
refinance, in whole or in part, eligible projects million sustainable bonds in January 2020 and
▪ The initial bond priced at 130bps over Gilts in accordance with its 2021 Sustainable November 2020 respectively
and accessed £225m at the time of issuance Finance Framework
4
Centrus transaction
Source: Centrus Transactions, Press
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Debt Capital Markets
Activity slowed toward the end of 2021
500
450
New Issuance 400
New Issuance
(Retained) 300 300
300
Tap 250 250 250
Tap
(Retained) 200
Retained Sale 125 125
100
100
50
35 35
16 11 16
0
MORhomes Southern Accent Platform Stonewater Clarion Optivo bLEND bLEND Thrive GB Social MTVH Poplar Anchor THFC 3
Housing Hanover
Date Nov-21 Oct-21 Oct-21 Sep-21 Sep-21 Sep-21 Aug-21 Aug-21 Aug-21 Aug-21 Aug-21 Jul-21 Jul-21 Jul-21 Jul-21
New Retained New New New Retained New New
Sale Type Tap Tap Tap Tap Tap Tap Tap
Issuance Sale Issuance Issuance Issuance Sale Issuance Issuance
Currency GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP GBP
Total Amount (m) 16 300 125 250 250 300 100 35 50 125 11 250 35 450 16
Amount Retained (m) 0 50 0 0 0 0 0 0 0 50 0 0 0 0 0
Maturity 2038 2036 2049 2041 2036 2051 2035 2049 2056 2051 2038 2036 2043 2051 2045
- / A+ / A2 / A+ / A3 / A- / Baa1 / - /
Issue Rating (M / S / F) - / A- / - A3 / - / - -/-/- A3 / - / - A2 / - / - A2 / - / - -/A/- - / A- / - - / A- / - - / A+ / - -/A/-
A+ - - -
Coupon 3.40% 2.38% 2.63% 1.93% 1.63% 1.88% 2.86% 3.46% 2.92% 4.68% 5.19% 1.88% 4.84% 2.00% 5.20%
Issue Spread (bps) 130 130 100 87 85 93 - 105 113 Private 137 115 182 93 102
= Centrus transaction
Source: Centrus ResiAnalytics
5
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Debt Capital Markets
Credit spreads tightened slightly during the month
130
125 Benchmark Last Close 1m Δ 3m Δ 6m Δ LTM Δ
iBoxx A 100 bps +0 bps +4 bps +2 bps -6 bps
iBoxx AA 99 bps -0 bps +4 bps -6 bps -22 bps
120
iBoxx Housing 101 bps -0 bps +4 bps +2 bps -7 bps
S&P A- Housing 99 bps -3 bps +1 bps -1 bps -24 bps
115 S&P A Housing 93 bps -2 bps -1 bps -6 bps -15 bps
S&P A+ Housing 92 bps -2 bps +4 bps +3 bps -9 bps
110
Credit Spreads (bps)
105
101
100 100
99
95 99
93
90
92
85
80
Jan-2021 Feb-2021 Mar-2021 Apr-2021 May-2021 Jun-2021 Jul-2021 Aug-2021 Sep-2021 Oct-2021 Nov-2021 Dec-2021
iBoxx A iBoxx AA iBoxx Housing S&P A- Housing S&P A Housing S&P A+ Housing
Note: S&P rating spreads exclude issuances from L&Q and Clarion.
Source: Markit, Refinitiv, S&P
6
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Residential, Social and Care Listed Comps
Residential and care sectors have generally proven resilient through the pandemic
All values in £GBP million and €EUR million for European companies, except for per share data
Share Price Gain / Fall Premium / Revenue
Mkt Cap NAV PER Net Debt /
Company EV (m) Current Discount to NIY(1) LTV Growth
(m) 52 Week 52 Week Share EBITDA(2)
Since 21 Feb NAV (FY ’21)
High Low
Residential
RESI REIT 0.0 23.0%
186 377 1.09 96.0% 124.7% 108.7% 1.07 3.3% 3.8% 46.0%
PRS REIT 0.0 105.8%
604 874 1.10 98.2% 144.7% 123.6% 0.99 15.8% 3.4% 42.0%
Grainger 9.1 16.3%
2,326 3,361 3.15 92.6% 122.5% 93.2% 3.06 10.5% 3.7% 30.4%
Vonovia
37,665 83,394 48.50 79.6% 103.0% 107.9% 59.47 -11.1% 2.6% 44.2% 25.2 9.9%
Deutsche Wohnen
14,679 26,341 36.98 69.7% 100.0% 113.4% 53.32 -30.0% 2.6% 35.4% 17.2 22.0%
Social Housing & Care
Civitas
597 872 0.97 80.1% 113.7% 94.6% 1.08 -10.2% 5.0% 34.6% 0.0 6.2%
Primary Healthcare
Properties 2,018 3,160 1.51 89.0% 105.7% 93.7% 1.10 40.2% 4.0% 40.9% 0.0 14.6%
Assura
2,056 3,063 0.70 86.3% 103.9% 86.0% 0.59 29.3% 3.6% 39.0% 9.3 8.3%
Target Healthcare REIT
732 839 1.18 93.7% 108.3% 95.9% 1.11 9.3% 6.0% 11.4% 0.0 12.9%
Notes:
1) Implied NIY based on EBITDA / EV is on a forward-looking basis
2) Forward looking Net Debt / EBITDA is on a 2021E basis
Sources: S&P Capital IQ - Market Data as of 4th January 2022, Company annual reports
7
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.
Strategic M&A, Equity Partnerships and Divestments
Even as 2021 drew to a close, there was continuing activity in the housing sector
Equity Investment NFP – JV Equity JV Equity Investment
(undisclosed) £1bn £500m (undisclosed)
June 2021 October 2021 August 2021 March 2020
▪ Auxesia Homes for profit RP founded in 2013- ▪ AHTO Group has partnered with Citi UK ▪ St Arthur Homes for profit RP founded in
primary client group includer former and • The partnership will aim to build around 2013.
in £1bn investment drive 5,100 homes for people over 65 across
current Armed Forces, NHS and Emergency
Service Personnel. ▪ Aim to acquire 4,000 affordable homes 34 different sites, with a gross ▪ Joint Venture established with equity injection
NatWestvalue
development Pension
of £4bnTrustee
when all by ESO capital to support growth ambitions of
▪ Joint Venture established with equity injection across three to five year period 2000 units in the next five years.
sites are completed.
by Matter Real Estate to support growth
▪ Up to £150m per project with ▪ Focus on Shared Ownership segment of
ambitions of 1300 units in the next five years. • All of the sites will be operated and
developments up to 500 units affordable housing and will build on existing
▪ Focus on affordable homes for rent, rent to managed by L&G-linked Inspired relationships with housebuilders to secure
buy and shared ownership schemes. ▪ Properties will include apartments and Villages with a focus on properties for additional S106 units.
houses ain cities and commuter towns people over 65.
▪ Centrus acted as strategic advisor for equity across the country ▪ Centrus acted as strategic advisor for equity
investment and joint venture. investment and joint venture.
Headline activity reported in the last month:
➢ Home REIT, the real estate investment trust specialising in accommodation for homeless people, has secured a new £130m interest-only debt facility
with life insurance and pensions firm Scottish Widows.
➢ Nuveen is in talks to make its debut in the later living and extra care sectors by backing a new £500m platform from Preferred Homes, The investor
is in talks with the group, which launched last March with the intention of building a platform of 4,000 units. Under its model, Preferred Homes will act
as developer and manager for the units, which will be let to tenants directly via local authorities.
➢ ARA Venn: for-profit borrowers to follow in future waves after ‘lots of interest’ in guarantee scheme The provider of the new Affordable Homes
Guarantee Scheme (AHGS) expects to see for-profit borrowers participate in the programme during “future phases of delivery”, following significant
interest from the subsector.
➢ Swan Housing Association has announced that it will form a partnership with Orbit Group, on the same day it had its viability and governance
grades downgraded by the Regulator of Social Housing (RSH).
➢ BtR pioneer Metropolitan Thames Valley Housing sells Fizzy Living stake for around £400m to Greystar
➢ Capital Letters, owned by 21 member councils, has revealed it is in advanced negotiations with investors which are set to inject £1.5bn investment
into 4,000 new homes for low-income families in London over four years.
Source: Centrus Transactions, Press
8
CONFIDENTIAL
Centrus transaction
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Appendices
Appendix I – Market Data
Interest Rates
Interest rates have picked up with the market expecting further rate hikes in 2022
LIBOR and Sterling 3mL Futures Historical LIBOR and Swap Rates
1.6% 2.0%
1.4%
Tenor Rate
1.2% 1.5%
SONIA 0.19060%
O/N 0.18063% 1.0%
1 month 0.18675% 0.8% 1.0%
2 month 0.22850% 0.6%
3 month 0.26225% 0.4% 0.5%
6 month 0.47363%
0.2%
12 month 0.81363%
0.0% 0.0%
Current Last Month 6 Months ago 3M LIBOR 5yr swap 10yr swap 30yr swap
6ML Swap Rates, Gilts & Swap Spreads
1.4% 70
Tenor 1Y 2Y 5Y 10Y 20Y 30Y 50Y 60
1.2%
Swap Rate 0.88% 1.20% 1.29% 1.21% 1.15% 1.10% 0.94%
50
1.0%
1 month Δ (bps) 13 13 10 14 20 23 25
40
3 month Δ (bps) 43 47 29 2 -14 -15 -15 0.8%
30
0.6%
Tenor 1Y 2Y 5Y 10Y 20Y 30Y 50Y 20
Swap Rate 0.88% 1.20% 1.29% 1.21% 1.15% 1.10% 0.94% 0.4%
10
Gilt Yield 0.51% 0.67% 0.81% 0.97% 1.19% 1.12% 0.87% 0.2% 0
Spread (bps) 37 53 48 24 -4 -1 7
0.0% -10
0 10 20 30 40 50
Years
Swap Spread 6mL Swap Gilt Yield
Source: Refinitiv
11
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Inflation
RPI breakevens have fallen following the BoE’s rate hike in December
RPI Swap Curve (Breakevens) Real Gilt Yield Curve
7.0% -2.0%
6.5% -2.5%
6.0% -3.0%
-3.5%
5.5%
-4.0%
5.0%
-4.5%
4.5%
-5.0%
4.0%
-5.5%
3.5% -6.0%
3.0% -6.5%
0 10 20 30 40 50 0 10 20 30 40 50
Years Years
Current Previous Current Previous
UK Inflation and RPI Swap Rates UK Inflation, Real Yields & RPI Swap Rates
8.0%
7.0% Tenor 1Y 2Y 5Y 10Y 20Y 30Y 40Y 50Y
6.0% RPI Swap Rate 6.34% 5.01% 4.46% 4.17% 3.80% 3.49% 3.28% 3.24%
Real Gilt Yield -5.26% - -3.34% -2.97% -2.53% -2.27% - -2.22%
5.0%
4.0% Aug-21 Sep-21 Oct-21 Nov-21
3.0% CPI RPI CPI RPI CPI RPI CPI RPI
Index 112.1 307.4 112.4 308.6 113.6 312.0 114.5 314.3
2.0%
MoM % 0.7 0.6 0.3 0.4 1.1 1.1 0.7 0.7
1.0%
YoY % 3.2 4.8 3.1 4.9 4.2 6.0 5.1 7.1
0.0%
Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21
RPI YoY CPI YoY 30 yr RPI Swap
Source: Markit, ONS, Refinitiv
12
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Bank Credit
Limited credit rating changes in the bank sector in recent months
Ring-Fenced / S&P Moody's Fitch 5y CDS Spread Change (bps)
Entity
Non-Ring-Fenced Mid-Spread (bps)
ST/LT ST/LT ST/LT 1 month 3 month 1 year
NatWest Group PLC* Non-Ring-Fenced A-2 / BBB P-2 / Baa1 F1 / A 96 -1 4 -4
NatWest Bank PLC Ring-Fenced A-1 / A P-1 / A1 F1 / A+ - - - -
The Royal Bank of Scotland PLC Ring-Fenced A-1 / A P-1 / A1 F1 / A+ - - - -
NatWest Markets PLC Non-Ring-Fenced A-2 / A- P-1 / A2 F1 / A+ 48 -6 1 -6
Lloyds Banking Group PLC Non-Ring-Fenced A-2 / BBB+ P-1 / A2 F1 / A 43 0 -3 -9
Lloyds Bank PLC Ring-Fenced A-1 / A+ P-1 / A1 F1 / A+ 35 -3 1 -2
HBOS PLC Ring-Fenced A-2 / BBB+ P-1 / A1 F1 / A+ - - - -
Bank of Scotland PLC Ring-Fenced A-1 / A+ P-1 / A1 F1 / A+ 50 -0 -0 0
Lloyds Bank Corporate Markets PLC Non-Ring-Fenced A-1 / A P-1 / A1 F1 / A+ - - - -
Barclays PLC Non-Ring-Fenced A-2 / BBB P-2 / Baa2 F1 / A 58 -7 4 -4
Barclays Bank UK PLC Ring-Fenced A-1 / A P-1 / A1 F1 / A+ - - - -
Barclays Bank PLC Non-Ring-Fenced A-1 / A P-1 / A1 F1 / A+ 54 -3 7 -3
Banco Santander SA Non-Ring-Fenced A-1 / A+ P-1 / A2 F2 / A- 38 8 6 8
Santander UK PLC Ring-Fenced A-1 / A P-1 / A1 F1 / A+ 82 -0 -0 -16
HSBC Holdings PLC Non-Ring-Fenced A-2 / A- P-2 / A3 F1+ / A+ 47 -11 -11 3
HSBC UK Bank PLC Ring-Fenced A-1 / A+ P-1 / A1 F1+ / AA- - - - -
HSBC Bank PLC Non-Ring-Fenced A-1 / A+ P-1 / A1 F1+ / AA- 34 -7 -5 0
Nationwide Building Society* N/A A-1 / A+ P-1 / A1 F1 / A+ - - - -
Allied Irish Banks PLC N/A A-2 / BBB+ P-1 / A2 F2 / BBB+ - - - -
MUFG Bank Ltd. N/A A-1 / A P-1 / A1 F1 / A- 27 0 0 3
iTraxx Banks** N/A - - - 55 -11 -2 -3
*LT Ratings are of Senior Preferred Debt.
**iTraxx Banks CDS is a composite index comprising of 30 equally weighted credit default swaps on investment grade European entities.
All ratings are obtained from each respective bank’s website (as of 31st December 2021).
Source: Bank Websites, Fitch, Moody’s, Refinitiv, S&P
13
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Bank Credit
Bank credit levelled off towards the end of 2021
Bank Group 5y CDS Spread (3 years) Bank Group 5y CDS Spread (1 year)
350 350
300 300
250 250
200 200
150 150
100 100
50 50
0 0
NatWest Lloyds Barclays NatWest Lloyds Barclays
HSBC Santander iTraxx HSBC Santander iTraxx
Source: Refinitiv
14
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Appendix II – Centrus Team
Corporate Finance Platform
Centrus’ corporate finance team provides a full range of integrated capital raising and strategic advisory capabilities, focused on RP,
education, social infrastructure and broader real estate sectors
Leading M&A £5bn raised in Capital £900m arranged in New Bank
£2bn+ of funding restructured
advisor in the RP sector Markets (since 2019)
funding
(since 2019) (Last 9 months)
A joined up platform offering stand-out advisory capabilities across the capital structure
Strategic Advisory Capital Raising Treasury Derivatives Analytics
• Capital Structure Optimisation & • Bank and Institutional Finance – • Treasury Management Policies • Treasury Management Systems
Strategy Senior & Junior Debt
• Strategic Treasury Management • Loan and Derivatives Valuation and
• Business Planning • Private Placements & Public Bond Financial Disclosures
Issues • Hedging Strategies
• M&A including Debt & Equity Sales • CVA/DVA Adjustment Valuations
• Project Finance • Valuation and Portfolio Modelling
• Equity partnerships & joint ventures • Hedge Accounting
(sourcing and structuring entity-level • JV Equity capital, • Benchmarking & Execution
capital) • Regulatory Reporting Services
• Sourcing and structuring of capital for
• Real estate assets monetisation growth and recapitalisation
• Liability Management • Entity-level and corporate platform
capital raise
• Debt & Derivatives Renegotiation &
Restructuring • Ratings Advisory
16
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Centrus’ Corporate Finance Team
The team brings together in excess of 200 years of unparalleled experience and market leading capabilities, no other advisory firm offers
the equivalent strength, breadth and depth of expertise, specialising in affordable housing sector
Corporate Finance, Treasury, and Planning – Affordable & Social Housing Investor Coverage
Paul Stevens Jonathan Clarke Phil Jenkins John Tattersall Maria Goroh
Managing Director Managing Director Managing Director Senior Director Senior Director
Head of Investor Coverage
Scott Douglas
Senior Associate
Tony Oakley Sam Goldman Lawrence Gill Tom Miller
Director Director Director Assistant Director
Equity
Omer Fazal
Akhil Shah Clara Hurst Senior Ravinder Bassi Aharon Donaghy Director
Assistant Director Associate Analyst Senior Associate Head of Real Estate
Ella Boomer
Paula Valero Marti Lucrezia Jaspal Sam Clutterbuck Analyst
Associate Baldeschi Chowdhary Analyst
Analyst Associate
17
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Credentials
Selected housing sector track record
Debt Capital Markets Equity
(Listed Debt & Private Placements) Bank Finance (M&A and Joint Venture)
£250m Strategic advisor
£350m 5 Yr Unsecured RCF
(with £100m £450m £100m £110m £200m Bridging on merger of
£225m New Facilities Raising Club deal across 5 Finance Radian and
retained) Public Bond Retained Bond Sale
Public Bond lenders Yarlington
Public Bond
£65m £16m £300m Strategic advisor on
£250m £140m Complete debt refinance £50m £50m Funding Restructure
Non recourse merger between
Debut Public Bond Tap of Existing Bond including Private Deferred Private Existing Facilities Restructure New Funding
development Fortis Living and
Placement Placement & New Facilities Raising Syndicated Loan
funding Waterloo Housing
Unsecured
Strategic Advisory
£30m £21m Group Consolidation Strategic advisor on
£75m £110m £120m Group Consolidation
Deferred Private Sale of Retained & debt restructuring merger between Green
Private Placement Private Placement Complete Debt Refinance & debt restructuring
Placement Bond Square and Accord
Group
Group Consolidation & Undisclosed
£25m £50m £215m Consolidation & £65m complete debt Strategic advisor for
£100m debt
Tap of Existing Bond THFC bLEND Public Bond debt refinancing equity investment and
Private Placement restructuring
restructuring joint venture
18
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Contact Us
Paul Stevens Jonathan Clarke
m: +44 (0) 770385 4575 m: +44 (0) 796898 5320 DUBLIN
d: +44 (0) 203 846 5672 d: +44 (0) 203 846 5675
e: Paul.Stevens@centrusadvisors.com e: Jonathan.Clarke@centrusadvisors.com 21 Clanwilliam Square,
Grand Canal Quay LONDON
Dublin 2 | D02 P860
T: +353 (1) 6539369 85 Queen Victoria
Phil Jenkins John Tattersall Street
London | EC4V 4AB
T: +44 (0) 203 846
m: +44 (0) 778820 9354 m: +44 (0) 742521 1508
5670
d: 44 (0) 203 846 5671 d: +44 (0) 203 846 5695
e: Phil.Jenkins@centrusadvisors.com e: John.Tattersall@centrusadvisors.com
Sam Goldman Lawrence Gill
d: +44 (0) 203 946 0374 m: +44 (0) 779143 2212
e: Sam.Goldman@centrusadvisors.com d: +44 (0) 203 846 5685
e: Lawrence.Gill@centrusadvisors.com
Omer Fazal Maria Goroh
d: +44 (0) 203 946 0379 m: +44 (0) 788563 7707
e: Omer.Fazal@centrusadvisors.com d: +44 (0) 203 9460346
e: Maria.Goroh@centrusadvisors.com
Tony Oakley
m: +44 776967 3481
d: +44 (0) 203 946 0361
e: Tony.Oakley@centrusadvisors.com
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19
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.Disclaimer
"Centrus Group" consists of Centrus Corporate Finance Limited and the following wholly owned subsidiaries; Centrus Financial Advisors Limited, Centrus Advisors Limited, Centrus Capital Markets
Limited, MDT Trading Limited, Centrus Europe Limited, Centrus Investment Management Limited, MDT Rail Lease Management Limited. The following companies are incorporated in England and
Wales as limited liability companies and having their registered office at Senator House, 85 Queen Victoria Street, London, EC4V 4AB; Centrus Corporate Finance Limited, number 07943605.
Centrus Financial Advisors Limited, number 10203539, Centrus Capital Markets Limited, number 11763025, MDT Trading Limited, number 10970702, Centrus Europe Limited, number 02036221,
Centrus Investment Management Limited, number 10861018, MDT Rail Lease Management Limited, number 11090252. "Centrus MDT", "Centrus Advisors" and "Centrus" are trading names of Centrus
Financial Advisors Limited. Centrus Financial Advisors Limited is authorised and regulated by the Financial Conduct Authority Firm Reference Number 750011. Centrus Capital Markets Limited, firm
reference number 924641, is an appointed representative of Centrus Financial Advisors Ltd, which is authorised and regulated by the Financial Conduct Authority, firm reference number 740011.
Please visit www.fca.org.uk for more information.
Centrus Advisors Ltd is a limited liability company incorporated in Ireland number 547394 having its registered office at 21 Clanwilliam Square, Grand Canal Quay, Dublin 2, D02 P860 and regulated
by the Central Bank of Ireland, firm reference number C189481.
This report or document or any of its content must not be distributed or passed on, directly or indirectly, to any other person without the express written consent of Centrus. Nothing within this
document should be construed as investment advice and should not be relied upon.
All of the views expressed in this report or document accurately reflect the personal views of the responsible employees of the Centrus Group.
The information contained in this report or document has been compiled by Centrus from sources and using data believed to be reliable and unless stated otherwise should be assumed to be using
end of day data, but no guarantee, representation or warranty, express or implied, is made by Centrus, its affiliates or any other person as to its accuracy, completeness or correctness. Centrus is
under no obligation to update, modify or amend the information. All opinions and estimates contained in this report or document constitute Centrus’ judgement as of the date of this report or
document, are subject to change without notice and are provided in good faith but without legal responsibility.
This report or document is not an offer to sell or a solicitation of an offer to buy any securities. This material may be prepared for general circulation to clients and may not have regard to the
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report or document (including without limitation in relation to any projection, analysis, assumption and opinion in this report or document).
Data is sourced from various sources including Reuters, Bloomberg, Markit and Centrus Market Data.
20
CONFIDENTIAL
Centrus Financial Advisors Limited is authorised and regulated by the FCA. Registration number 750011.You can also read
