Pension Insurance Corporation completes investment in Herefordshire Housing

London, 9 November 2016 – Pension Insurance Corporation (“PIC”), a specialist insurer of defined benefit pension funds, has invested £35 million in secured debt issued by Herefordshire Housing, a not-for-profit group which provides home and support services to people across Hereford and the surrounding area. PIC has continued to invest in the social housing sector in 2016 through innovative transactions and has invested more than £600 million in the sector to date. As a growing business, PIC has further capacity to invest and a strong pipeline of transactions from high quality issuers who are well placed to deal with changes in the sector.

In September 2016, PIC published a White Paper, “How institutional investors are investing in local communities”. The document aims to highlight investment best practice by, and in, Housing Associations in order that this can be shared and developed more widely. Housing Associations are clear that without the long-term relationships and security of financing that can be offered by institutional investors, development plans would need to be cancelled or scaled back.

Key aspects of the Herefordshire Housing transaction:

• Agreed terms for the immediate and future purchase of £35m of retained bonds, staggered over the next two years
• As with previous PIC investments in social housing, this phased draw-down structure benefits Herefordshire Housing through certainty of funding costs, with reduced cost of carry
• Funding to help provide 330 new properties 
• 33 year maturity (2049), to match PIC’s liabilities
• Secured on social housing properties

Peter Brown, CEO of Herefordshire Housing, said: “We have an ambitious strategy to grow our housing stock by 1,000 by 2020, providing more homes in Herefordshire for those in need. This bond sale gives us the platform to increase the rate of development.”

Elizabeth Cain, Debt Origination Analyst at Pension Insurance Corporation, said: “We are delighted to work with Herefordshire Housing to help achieve its growth ambitions. The ability to offer a forward purchase of retained bonds is just one example of how we continue to work with borrowers to offer flexibility in funding structures.”

John Coleman, Associate Director at TradeRisks, who arranged the transaction, commented: “This innovative transaction has enabled Herefordshire to secure long term funding, in an attractive market, whilst managing its cost of carry.”

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Notes to Editors:

For further information please contact:

Pension Insurance Corporation

Jeremy Apfel
+44 (0)20 7105 2140
apfel@pensioncorporation.com

Teneo Strategy

Anthony Silverman
+44 (0)20 7240 2486
Anthony.Silverman@teneostrategy.com

About Pension Insurance Corporation
Pension Insurance Corporation plc ("PIC") provides tailored pension insurance buyouts and buy-ins to the trustees and sponsors of UK defined benefit pension funds. PIC brings safety and security to scheme members' benefits through innovative, bespoke insurance solutions, which include deferred premiums and the use of company assets as part payment. At 30 June 2016 PIC had £18.4bn in assets and had insured more than 130,000 pension fund members. Clients include FTSE 100 companies, multinationals and the public sector. PIC is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority and PRA (FRN 454345). For further information please visit www.pensioncorporation.com

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