Client stories

Origin secures £120m funding through Green Private Placement debut

Origin, a repeat issuer in the Private Placement market, turned to NatWest to secure at least £80m – and a maximum of £120m – of long-dated attractively-priced funding through a Private Placement.

Helping people and neighbourhoods thrive

Founded in 1924 Origin offers affordable housing, managing over 6,900 properties across 14 areas in North London and Hertfordshire. The social landlord is committed to help people and neighbourhoods thrive. Therefore, working in partnership with Local Authorities, Origin delivers a range of care and support services to people who are vulnerable due to learning disabilities, old age, or other issues.

Furthermore, the housing association also runs and supports initiatives to encourage inclusion and involvement, helping people to become actively involved in building sustainable, healthy, and vibrant neighbourhoods. Origin also offers help for people to find sustainable employment, manage their money, and stay in their homes for longer.

Origin’s first Green Private Placement attracts new investors and high orders

Origin, a repeat issuer in the Private Placement market, turned to NatWest to secure at least £80m – and a maximum of £120m – of long-dated attractively-priced funding through a Private Placement. Showcasing its ESG credentials was the second key objective for the housing association.

In its role as Sole ESG Structuring Advisor, the NatWest team worked closely with the Origin team to help develop a Green Loan Framework in line with the Loan Markets Association’s (LMA) Green Loan Principles, (PDF) that demonstrates how Origin intends to apply an amount equal to the net proceeds of the Notes towards the financing and refinancing of energy efficient buildings at EPC ratings of A and B.

In its role as Sole Agent for the Private Placement, the NatWest team marketed the transaction to a variety of UK and North American investors in order to maximise momentum and achieve the strong competitive tension required to help Origin price with a competitive documentation and pricing package. The deal team selected investors based on their track record in investing in the housing association sector, and in addition included a number of new investors, who had previously expressed strong interest in investment opportunities in the sector.

Given the time that had elapsed since Origin were in the market, both teams collaboratively prepared a detailed Investor Presentation, which not only provided an overview of Origin’s strong credit proposition but also highlighted its strong ESG credentials and the new Green Loan Framework.

The comprehensive preparations paid off, with total offers of £300m coming in from investors. Given the strength of the order book, Origin was able to upsize the transaction to £120m and achieve its core financing objectives, including  very attractive pricing across a range of long-dated tenors from 15-30 years as well as a deferral for 6 months at a minimal cost. Furthermore, the deal allowed Origin to diversify its investor base as it opted for new investors only, all from the US, which the NatWest team had introduced to them. A first: Origin attracted a US investor who had never invested in the housing associations sector before.

Funding will help to invest in communities that people are proud to live in

George Flynn, Debt & Financing Solutions, NatWest, commented on the transaction: “We are delighted to have supported Origin in this innovative and landmark transaction which, we believe, is the first LMA-aligned ‘use of proceeds’ in a Green Private Placement for a Housing Association. This demonstrates NatWest’s commitment to the social housing sector, to supporting clients in showcasing their sustainability credentials, and in structuring transactions in line with industry standards.”

Sonia Gadhia, Private Placements, NatWest, commented “It is great to see continued sector support from the Private Placement investor base beyond the local UK investors. Origin’s well-structured and thought out presentation of their clear strategy and strong credit metrics along with thorough and timely responses to investor questions really helped to generate strong investor interest in the deal. It was really nice to see that one US investor chose Origin as their first investment in the Housing Association sector. NatWest are doing a lot of work with new investors with the aim of increasing global liquidity sources for the sector.”

Dr Arthur Krebbers, Head of Sustainable Finance, Corporates, NatWest, “It is encouraging to see continued sustainable debt momentum within the housing association sector, which as a sector clearly has a major social and environmental role to play. The Origin transaction we structured demonstrates how you can embed suitable sustainability technology for both the borrower and the private placement market.”

Carol Carter, Chief Executive, Origin Housing, said: “We are delighted to have attracted a high level of interest from investors and to have secured terms which will support us well into the future in our ambitions to provide new affordable homes and invest in creating homes and communities people are proud to live in. And we are so grateful for all the hard work, support and guidance from the NatWest team. They were great to work with.”

Gloria Yang, Deputy Chief Executive, Origin Housing, added: “With our long and established social value credentials and our commitment to environmental sustainability, we are very pleased to bring four new investors on board to support our investment in homes and local communities. A huge thank you to the NatWest team for all their advice along the way, especially their support for our Green Loan Framework.”

The information provided in this article has been prepared by National Westminster Bank Plc (NatWest) for information purposes only and is subject to change from time to time. The information and views expressed should not be treated as advice or a recommendation of any kind. NatWest makes no representation, warranty, undertaking or assurance of any kind (express or implied) with respect to the adequacy, accuracy, completeness or reasonableness of the information provided and disclaims all liability for any use you, your affiliates, connected companies, employees, or your advisers make of it. NatWest accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However, this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed. Copyright 2021 © NatWest Bank Plc. All rights reserved.

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