Civitas Social Housing announces seven year term facility with M&G

Civitas Social Housing (CSH) has announced that the Company has secured a new seven year term, interest only, loan facility of £84.55m from M&G Investment Management Limited, a new lender to the Company. The new facility is priced at 2.75% above a fixed rate set by reference to the LIBOR swap rate of the loan term, and is repayable seven years from the date of utilisation. It is secured against an existing portfolio of specialist supported living assets.

CSH says that the news facility is designed to support its continuing growth plans and the manager intends to utilise the proceeds of the facility during 2021 to enable the purchase of high-quality properties that form part of the pipeline of new transactions. It says that these transactions are expected to further enhance both rental income and in due course dividend cover.

The drawdown of the Facility will increase the Company’s LTV (based on gross portfolio assets) to 34.6% maintaining the Company’s ongoing objective of a preferred gearing level of  c. 35% of gross portfolio asset value with a ceiling of 40% of gross portfolio asset value.

Comments from Michael Wrobel, Chairman of Civitas Social Housing

“We are delighted to have secured this new loan facility from M&G, a leading institutional lender with extensive experience and understanding of the social housing sector.  We expect this loan to be utilised over the coming months to bring forward our extensive pipeline of high quality properties and continue to deliver on our dual mission of stable long-term income for our shareholders and excellent long-term accommodation for the residents in our properties.”

Comments from Duncan Batty, Director, M&G Investment Management Limited

“We are very pleased to provide this new seven year facility for Civitas to enable the Company to continue to expand its portfolio of dedicated care-based accommodation.”

[QD comment: the new facility is good news as it will allow Civitas Social Housing to continue with its expansion plans, which CSH says will enhance both rental income and in due course dividend cover. However, it is also good for society as a whole too. Every year, social advisory firm The Good Economy publishes a report examining the social impact of CSH’s investments. While it was not able to publish one last year, due to COIVD, the 2019 report found CSH to be an “authentic impact investor” and the Social Profit Calculator (SPC) calculated the social value of CSH’s portfolio in monetary terms to £114m of social value per year. This equates to £3.50 of social value being created for every £1 of annualised investment.]