Posted on 20 January 2020
Hyde Housing Association has signed a new £50m loan with Wells Fargo Bank N.A. London Branch (“Wells Fargo”), further enhancing its fully-funded five-year development plan. This is the first time that Wells Fargo has invested in the social housing sector in the UK and demonstrates their confidence in the strength of Hyde.
The loan from Wells Fargo adds to Hyde’s existing debt portfolio which comprises two other loans signed last year - a £200m NatWest loan over a ten-year period and a £150m club loan over a seven-year period; both on pricing comparable to, or better than, a bond. As revolving facilities, they have flexible drawdowns and can be drawn at any time. The Wells Fargo facility increases the club loan from £150m to £200m.
Anna Wallace, Hyde’s Treasurer, said: “We are delighted to work with Wells Fargo and bring them in to our existing club deal, representing their first deal in the sector. We have found Wells Fargo to be a pleasure to deal with and are looking forward to building on our relationship in future. The substantial interest that Hyde have had from our investors in our debt raising activities has demonstrated the support and positivity that lenders see in Hyde and the wider sector. The basis of the club deal puts all investors on the same terms which makes the funding quick, easy and cost effective to execute and maintain..”
John Langley, Regional President EMEA, Wells Fargo said: “We are absolutely delighted to partner with Hyde on our first financing to a UK Housing Association. Affordable housing finance is a key product line for Wells Fargo in the US and we are looking forward to expanding our footprint to the UK. It is an exciting time for the sector and we hope to provide a meaningful contribution through our wide range of products as we seek to increase our commitment to the UK real estate market.”
Hyde has a fully-funded five-year development programme, which has been stress-tested under an enhanced Bank of England model. The new facility addition helps to maintain the funding required for the development programme, even under a severe stress test, further into the future.
Julian Barker, partner at Devonshires who acted for Hyde, said: “This loan by Wells Fargo, the first into the RP sector, is hugely significant for Hyde and indeed other housing associations. It shows great faith in the strength of Hyde’s business and the buoyancy of the RP sector as a whole. I am delighted that Devonshires was able to work closely with all parties involved and help get the loan secured for our client.”
Steve Mackie, Head of Finance, Addleshaw Goddard, commented: “It was excellent for our team to be able to support Wells Fargo and the existing lending club on Wells Fargo’s first loan into this important sector with Hyde where it will be focussed on building and developing financially accessible homes.”