Kingdom Housing Association has been shortlisted in the National Housing Federation Housing Finance Awards 2019.
Kingdom has been shortlisted in the Treasury Team of the Year category, for their team work in delivering their £85 million debut private placement along with other funding from the Scottish Government charitable bond. Kingdom’s treasury team consisted of staff from the association and external advisers.
Kingdom engaged all of its advisors, for the private placement process, using a regulated procurement process. The advisers included QMPF, a new provider in the Scottish sector for treasury management advice; NatWest Markets (NWM) as lead agent; and Harper Macleod (HM) providing legal services.
The process for delivering the Private Placement solution started in 2016, when it was proposed that a significant variation to the traditional funding plan was required.
Kingdom’s cash flow forecasting identified the requirement for £75 million from 2017, to facilitate the delivery of the planned new supply programme. Kingdom took advantage of opportunities that arose through the Allia Impact Finance-Scottish Government charitable bonds during the period which deferred the forecast for funding through the placement.
During early 2017 the treasury team engaged with Kingdom’s Board, to brief and inform them about the process, and to determine whether a private placement was the right vehicle to secure the funding. Further meetings and detailed training were undertaken with the Board, which continued throughout the process, and a short life working group was established to take key decisions, particularly at the pricing date.
Nick Pollard, Kingdom’s director of corporate support services, explained: “In April 2018 the treasury team embarked on the challenging delivery of our debut private placement in a 10- week timeframe. Considerable preparatory work, by everyone involved, enabled the investor presentation materials to be developed, which reflected the financial strength and the positive credit of Kingdom to investors.”
Nick added: “Slippage in the timetable was a key issue, given we wanted to secure funding in advance of the Brexit leave date, by a minimum of six months.”
Kingdom received significant interest from the investor market during the two-day investor presentations both from the UK and internationally. The due diligence period saw more than 150 detailed business plan, sensitivity analysis, covenant and other queries from potential investors. Kingdom’s team responded to all the queries quickly and effectively to meet investor expectations.
Kingdom’s debut private placement is the largest in amount for a Scottish RSL outside of the Wheatley Group, securing £85 million in funding.
Kingdom received bids from six investors in amounts which meant it was more than six times over-subscribed, which is unprecedented in the Scottish sector. Kingdom also secured the 30-year funding at margins which were highly competitive together with a deferred drawdown of a year leading to significant business planning rate savings.
Bill Banks, group chief executive with Kingdom, said: “We have significant growth plans for the future, including the development of 2,500 homes by 2022 / 23 and the private placement solution provides a balanced debt portfolio approach to our borrowing, which will allow us to progress our planned programme.”
Bill added: “Our treasury team demonstrated excellent team working both internally, with other departments and with external advisers, delivering a credit proposal which obtained unrivalled outcomes in all areas and I would like to congratulate everyone involved, being shortlisted in the housing awards is a fantastic achievement.”
The awards will be announced at the Housing Finance Conference, in Liverpool on 20 March 2019. Kingdom has been shortlisted along with five English housing associations and the judges will be rewarding the treasury team who is judged to have made the most effective and practical contribution to their association’s treasury position in the context of their business objectives.