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Trowers & Hamlins has advised social housing provider Midland Heart on £200 million new bilateral loan facilities from HSBC UK Bank plc, Nationwide Building Society and Lloyds Bank plc.

We advised Midland Heart on new facilities of £200 million all of which completed during December. This is a significant financing transaction for the Midlands based social housing provider and the secured funds will be vital to the delivery of its next corporate strategy. The transactions involved concurrently negotiating and coordinating terms across the three funding arrangements. Midland Heart now has available facilities of:

  • a £100 million revolving credit facility with HSBC UK Bank plc for a five year term, including an option to extend for two additional years.  HSBC is a new lender to Midland Heart and our work involved ensuring that Midland Heart's internal requirements in particular around the flexibility to release security when appropriate were incorporated;
  • amendment and restatement of Midland Heart's existing facilities with Lloyds Bank plc to provide for a new revolving £50 million credit facility; and
  • an additional £50 million ten year revolving credit facility with existing lender Nationwide Building Society.

Midland Heart was able to utilise the security held in its existing security trust to reallocate security between the three lenders, maximising the benefit of any uplift without the need for full property due diligence.

We have seen a surge in new lending activity from a number of funders active in the sector during the second half of this year which looks set to continue into 2024.

Trowers advised on the banking aspects of the transactions and the team consisted of Eleanor James (partner), Jasna Djurisic (managing associate), Anna Beckett (senior associate) and Jasmin Rakkar (trainee solicitor). Devonshires LLP advised on property security. Savills Financial Consultants supported Midland Heart on treasury aspects, led by George Flynn. Pinsent Masons LLP acted for all three funders.

Anna Beckett, Senior Associate, in Trowers' national Housing Finance team and based in the Birmingham office, commented:

"We are delighted to have assisted our long-standing client Midland Heart in securing new money to help achieve their goal of providing those in need with an affordable place to call home."

Joe Reeves, Executive Director of Finance & Growth at Midland Heart, said:

“The relationship we have with our lenders and investors is crucial to the implementation of our retrofit strategy in the homes we rent and the continuation of our ambitious programme to build more quality, affordable homes across the region.

“We’re thrilled to have secured these credit agreements, which recognise the value of affordable housing as an investment and reaffirm Midland Heart’s position as a stable and financially viable organisation that investors feel confident doing business with.”