The “shackles” are off according to a leading housing association which says a new refinancing deal will see it rapidly increase its development programme over the next 10 years.
Adra (previously known as Cartrefi Cymunedol Gwynedd) has just completed a refinancing deal worth £155m with four new lenders.
The group says this will see its target for new homes increase from 350 over the next five years to 1,350 in the next 10 years.
Rhys Parry, Adra’s director of Finance, said: “The shackles are off - we can now put our foot down and increase the speed of development.
“This is a game changer for us.”
“But we will only build in the right places, we won’t get carried away.
“We are working with developers across North Wales and we will strengthen these relationships which will have positive consequences for employment right across North Wales.”
The company, with its headquarters in Parc Menai, Bangor, is a leading supplier of social and affordable housing and was established in 2010 to take on the housing stock from Gwynedd Council.
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The housing association manages over 6,400 homes.
Securing £155m in new funding at “very attractive interest rates” will mean significant future interest cost savings and will increase Adra’s borrowing capacity by £72 million, to help build more affordable homes in the region.
“Securing this new refinance deal gives us much more flexibility to grow as a company and has enabled Adra to reduce its overall interest rate payable by half,” said Mr Parry.
“It was time to remove the restrictive covenants and business plan controls that we faced on the legacy debt as a result of being a stock transfer association, so that we could fulfil our potential to deliver new homes and drive even more investment in our current stock, delivering much needed new housing across north and mid Wales.”
Rhys added: “For the past ten years, Adra – as we are now known - has a well-established track record for delivery.
“With 178 units currently in development, we have a strong reputation for building new properties. The refinancing now means we can start developing over 1,350 additional homes over the next 10 years.
“This is around 1,000 more homes than we would have been able to deliver under our old funding arrangements.
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“We are also very pleased that Adra’s financial and operational strength meant that we were able to attract significant interest from lenders. Funding offers of almost £500m were received - three times higher than our funding requirement.
“It is also particularly pleasing that we have attracted a new lender to the Welsh social housing sector, and we look forward to enjoying long-term relationships with all our new lenders.”
Sohail Singal, associate director at JCRA, said: “We were delighted to act as debt and treasury adviser to Adra and achieve such a great result in refinancing its legacy debt.
“The combination of a private placement and new bank funding has allowed Adra to significantly cut interest payments. The team can now grow and achieve its ambitions to support the local community with new homes.”