Oaklee are delighted to announce details of a long-dated (25 years+) €50m debt financing agreement with German-based Norddeutsche Landesbank (NORD/LB).
The debt facilities are based on a project financing structure and secured through a wholly owned subsidiary and charity, or Special Purpose Vehicle (SPV), of Oaklee. It is the first AHB to establish a financing structure of this type to secure an attractive fixed rate of borrowing over the term of the loan and access to a short-term working capital facility.
Oaklee manages 900 social homes and said the loan facility will be used to purchase 250 additional residential units for social housing throughout Ireland. A deal has already been agreed with the Housing Agency for the acquisition of 148 vacant properties, with the majority located in Dublin.
The Special Purpose Vehicle (SPV) loan structure provides Oaklee with access to committed, long-term fixed rate debt from a private funder utilising the existing Capital Advance Leasing Facility (“CALF”) and Payment and Availability (“P&A”) funding support structures available to AHBs from the Department of Housing, Planning and Local Government through local authorities.
Sharon Cosgrove, Chief Executive of Oaklee Housing, said:
“Our innovative SPV financing structure and subsequent agreement with NORD/LB is putting more than €50million directly into the delivery of circa 250 social homes in the areas where they are needed most. It is pleasing to see an international bank investing with confidence in large scale housing programmes and we hope others will follow.
“This is one of the most cost-effective long-term finance arrangements ever used in Ireland and means that we can make public money go further and deliver more. It represents good business for Oaklee and is a strong vote of confidence in our ability to deliver high quality homes for those in greatest need across Ireland in the years ahead.”
Eoghan Murphy T.D. Minister for Housing, Planning and Local Government welcomed the news that Oaklee has secured this loan facility. He said that he recognises the valuable contribution that Approved Housing Bodies make to the delivery of social housing and he noted that there are ambitious targets set for the AHB sector in the implementation of Rebuilding Ireland. He added that the news regarding this loan facility demonstrates the potential for the AHB sector in providing social housing.
John Hanley, Senior Director, NORD/LB said:
“As one of the leading banks providing finance for social infrastructure projects across Europe, NORD/LB is delighted to finance this pathfinding project in partnership with Oaklee Housing and to establish a new template for the funding of social housing in Ireland.
“The project with Oaklee is NORD/LB’s first social infrastructure investment in Ireland and an important step in the development of AHB financing. Furthermore, it is a significant milestone in the way social housing is provided and NORD/LB is proud to be involved in developing and delivering homes for those in need.”
Centrus supported Oaklee through the process providing financial advice on potential debt structures and conducted engagement with a range of prospective funders, including domestic and international banks and institutional investors, on behalf of Oaklee before identifying NORD/LB as offering the best combination of price and maturity.
Jason Murphy, Managing Director of Centrus said:
“We are delighted to have advised Oaklee on this innovative financing package, which we hope will strongly assist in the development of future private financings in the AHB sector.”
Established in 2001, Oaklee Housing has quickly grown into one of the leading social housing providers in Ireland managing 900 high quality modern homes that accommodate older people, families, mature singles and people with complex needs. Future delivery plans are geared towards significantly increasing stock through a combination of acquisitions and construction.
Oaklee Housing is a member of the Choice Housing Group, one of the largest housing associations within Northern Ireland and the UK. In 2016, Choice closed a direct loan facility worth £150m with the European Investment Bank for social housing projects in the north.
The Dublin office of international legal business DWF, acted for NORD/LB on the project financing. Garrett Monaghan, Head of Projects with partner Michael Neary leading on real estate matters, led the DWF Dublin team.
Irish law firm ByrneWallace advised Oaklee Housing and the borrower SPV, Acorn Housing. Deirdre McBennett, Partner in the Banking & Finance department, led along with Michael Walsh, Partner and Head of Property; Neil Keenan, Partner, Corporate; and Anthony Smyth, Head of Tax, along with their respective teams.