Trowers & Hamlins advises Eastlight on £120m private placement
A £120m private placement funding deal with four North American investors will help Eastlight Community Homes deliver its pledge of 3,800 new homes in the five years to 2026.
The 12,000-home, resident-led housing association increased the amount it planned to borrow due to strong investor demand that saw the deal significantly oversubscribed. The overall interest rate for Eastlight’s debut private placement will generate significant funding cost savings, totalling over £1m per year more than expected.
The Essex and Suffolk-based housing provider received £60m of the funds on 19 August, with the balance due in May 2022. NatWest acted as sole Private Placement Agent.
Trowers' Banking team advised on all aspects of the financing. Trowers took the lead on drafting the note purchase agreement to ensure that the terms were advantageous to Eastlight when they presented the document to potential investors. Trowers also liaised closely with US counsel, Morrison & Foerster (UK) LLP to include US wording in the note purchase agreement before going to market which assisted Eastlight in creating US investor demand and achieving excellent pricing.
The banking team was led by partner Neil Waller with associate Jane Kirkham assisting. The Trowers' Banking team also consisted of partner, Ellie James and trainee Cirklen Yu. The team worked closely with Eastlight's financial advisors and Natwest Markets in order to secure the best position for them.
David Hall, Executive Director of Resources at Eastlight, said:
“We were clear when we created Eastlight in July last year through a merger, that we would ensure residents felt the benefits of our increased scale. This private placement at a very competitive price is clear evidence of this and will go a long way to delivering our promise of providing 3,800 new homes between 2021 and 2026.
“We launched with an interactive virtual roadshow which successfully engaged investors and who asked us a wide range of questions, covering our development strategy, sales programme, financial performance, COVID-19 response and strength of governance. They were also keen to understand more about the benefits of Eastlight’s community gateway shareholder structure that many had not seen before.”
“We are very grateful for the support of Trowers and our other advisors who helped to complete this exciting deal for us. Together we have achieved a great outcome and we are delighted to be working with four new overseas investors for the first time. We did not specifically target North American investors but it was thought they were likely to offer better value and that was the case – we outperformed our expectations.”
Neil Waller, banking and finance partner at Trowers & Hamlins, said:
"It has been a great pleasure to work with David Hall and his colleagues at Eastlight to achieve this great result, which promises to put them in a strong financial position for many years to come."