Slaughter and May advised the National Wealth Fund (“NWF”) in relation to a dual guarantee structure in aggregate of up to £150,000,000 to support The Housing Finance Corporation (“THFC”) to make long-term loans to help registered providers retrofit their social housing stock in the UK. The portfolio of loans to be advanced by THFC will be financed by bond investors. Rothesay, the UK’s largest specialist pensions insurer, has committed to provide THFC with 100% of the initial £150m bond investment. This partnership represents the first occasion that NWF has provided guarantees for this purpose to bond market investors.
Giving bond market investors access in this way helps accelerate the retrofit of social housing stock across the UK, thus significantly reducing both the sector’s energy consumption and emissions. Retrofit loans provided by THFC can be used by social housing providers across the country for the installation of low carbon heating, insulation, low carbon lighting, renewable energy, ventilation and heating controls, as well as work on resilience measures and biodiversity.
The announcement of this guarantee with THFC confirms the agreement in principle previously outlined in October last year, building on the funding announced for Barclays UK Corporate Bank and Lloyds Banking Group to support the retrofit of social homes across the UK (on which we also advised NWF).
Slaughter and May worked with NWF’s internal legal and business terms to develop this innovative structure and implement the transaction.