GreenSquare Group is celebrating the successful completion of work to harmonise terms with existing and new lenders on c£350m of existing debt; £140m of new revolving credit facilities; and £50m of new borrowing with BlackRock’s European Infrastructure Debt team ('BlackRock').
“This is a brilliant outcome in some of the most challenging market conditions I can remember,” says chief executive Ruth Cooke. “The completion of this hugely important work enables us to manage the business much more effectively and gives us increased borrowing capacity going forward, supporting the development of more new homes and better services for our customers.”
The covenants (or terms and conditions) that applied to the borrowing of Westlea, one of GreenSquare’s registered providers, were markedly different to those for the parent company GreenSquare Group, also a registered provider.
As finance director Iain Bacon explains: “The way we've had to report on our financial performance and manage it, in terms of complying with the covenants, has for so long been unnecessarily complicated and challenging.
“These new harmonised terms simplify things significantly.
“Instead of Westlea and GreenSquare being looked at as separate entities, the combined financial performance of both can now be taken into account when we look at how we're doing against the covenants; the new agreements mean that the key covenants are now aligned.”
In addition to harmonising terms and aligning covenants, and utilising the new pooled security structure, GreenSquare has secured £140m of additional revolving credit facilities ('RCFs') from three lenders, two of which are new to the group. One of the RCFs includes the group’s first ESG-linked facility, relating to improving the thermal efficiency of its existing housing stock.
“This enables the group to increase its liquidity, on a cost-effective basis, to ensure we have funds available so that we can fund our development programme going forward,” says James Tarrant, head of corporate finance and treasury.
“We are also delighted to have negotiated significant new borrowing from BlackRock, an existing lender. They've agreed to an additional £50m over a 25-year period which has allowed us to remove a lender who couldn’t agree to the terms we achieved with other existing and new lenders.”
“Positively, the new funding platform includes £115m of new unsecured funding which allows us to better utilise our asset base, providing us with further capacity to deliver our corporate plan.”
These key corporate finance projects involved a significant amount of work with existing lenders BlackRock, Lloyds Bank, MetLife Investment Management, NatWest, Santander and Triodos and the development of new relationships with Barclays and MUFG. The security trust arrangements are provided by Prudential.
Devonshires advised GreenSquare on the loan and security documentation and Trowers & Hamlins advised on the property charging aspects. Addleshaw Goddard and Clarke Willmott acted for the funders. Treasury advisory services were provided by Centrus and JLL provided valuation services.
“Close collaboration between all the parties involved was absolutely instrumental in the success of the project,” said James Tarrant.
Pictured, L-R: Ruth Cooke, Iain Bacon and James Tarrant