Barcud completes post-merger refinance

Barcud completes post-merger refinance which supports delivery of our  strategic objective to provide 5,000 affordable, mixed tenure, high quality  sustainable homes by 2025 

Following over two years of planning, the merger of two housing associations based  in mid and west Wales was finalised on the 1st of November 2020. This was the first ever merger of a traditional housing association and a stock transfer organisation in  Wales.  

Barcud owns and manages more than 4,000 homes and employs over 300 members  of staff across Ceredigion, Powys, North Pembrokeshire and Carmarthenshire. The  Barcud group includes Powys Care and Repair, EOM and The Care Society subsidiary  companies. 

Kate Curran, Group Director of Finance and ICT, said, “Working as one organisation  strengthens our services and governance and allows us to use our collective resources  and expertise to help maintain, improve and build high quality, energy-efficient,  affordable homes. It has also allowed us to refinance to build on our strengths. Post 

merger, it was our intention to refinance existing bank funding in order to maximise the  treasury benefits available to Barcud, including attracting low cost long-term finance.  The merged association had historic, high interest, bank loans which were not holding  any value compared to long term, low interest, borrowing available now.  

Our treasury strategy has now been successfully implemented, with support from the  market leading advisors, Centrus. We have established a new relationships, with  Aberdeen Standard Investments (ASI), a strategic asset management partner of  Phoenix Group, the UK’s largest long-term savings and retirement business, who have  provided a £50m Private Placement at a fixed rate significantly below our business  plan assumption; this long-term funding provides a great foundation to make future  investment decisions. The proceeds have been used to refinance existing bank debt,  with the remainder available to support our growth plans.  

Barcud has also extended its excellent existing relationship with Barclays Bank plc,  with a £20m Revolving Credit Facility providing flexible finance in the shorter term.  

A feature of both new funding agreements is linkage to Barcud’s Sustainability  objectives, where we will benefit from further reductions in the cost of finance if various  agreed measures, linked to our Environmental, Social & Governance impacts are  achieved. 

Finalising this refinancing project within 9 months of merger has been a remarkable  achievement for everyone involved. Attracting new finance on excellent terms reflects  the strength of Barcud, which has now been further enhanced”. 

Steve Jones, Group Chief Executive for Barcud, added, “both associations shared  values and an ambition to address the shortage of much-needed quality, affordable  housing in mid and west Wales. Barcud is aware of the challenges faced by the local  housing sector. Together with our partners within the local authorities and the support  of Welsh Government, we are now in an even stronger position to continue delivering  on this objective and to commit fully to Welsh Government’s ambitions for providing  new, energy efficient and affordable homes in rural areas. We continue to listen to our  tenants and work hard to develop a service that meets the needs of our communities.  We live and work in these communities and want tenants and staff to be proud of the  services we deliver. With our team’s in-depth understanding of the needs of the area  and our combined strength and efficiency, we can meet the range of housing needs in  the heart of Wales. Following an intensive interview process, Barcud was pleased to  be in a position to appoint Centrus as advisors to guide us through a rigorous  refinancing project to ensure we, as an association, are fit for the future. Completing  the project has provided firm foundations for our future developments.” 

We could not have achieved such a successful outcome without the support of our  advisor and funding partners.  

Paul Stevens, Executive Director, Centrus, said “It’s been a pleasure working with the  Executive & Board of Barcud to successfully implement a new treasury strategy,  achieving outcomes which have exceeded objectives agreed as part of the business  case. Barcud is now better placed to achieve its growth ambitions, with a stronger  treasury platform underpinning investment decisions as well as maximising the  benefits of Sustainability-ESG linkage.” 

Fiona Dickinson, Investment Director, Aberdeen Standard Investments, commented  “With our extensive knowledge of the UK affordable housing sector, ASI was well  positioned to play a crucial role in connecting the long-term capital of our strategic  partner with this super opportunity to fund new homes in Wales, deliver a positive ESG  impact and change people’s lives for the better”. 

Michael Eakins, Chief Investment Officer, Phoenix Group, said: “We are delighted to  have completed this transaction to provide energy efficient social housing across the  mid and west Wales region as we continue to innovate with our capital to drive  environmental and social impact. Structuring this deal with energy efficiency targets  drives to the heart of our sustainability agenda and our focus on ensuring our  investments help to build back better and greener. We know that there is a chronic shortage of housing across the United Kingdom and we are committed to helping  people and communities in every corner where we can.” 

Richard Whittaker, Relationship Director, Barclays added “We are pleased to be able  to continue supporting Barcud through the next phase of its refinancing strategy, with  the provision of a sustainability linked revolving credit facility. This deal further  underlines our ongoing commitment to the UK housing sector, and we look forward to  working closely with the management team to help this ambitious housing association  achieve its objectives over the coming years.” 

Barcud Group CEO Steve Jones  outside the association's Head Office  at Lampeter.

Quick reference data:  

Stock : 4,000 rented and leasehold dwellings Staff : 300 full and part time 

Head Office : Lampeter 

Regional Office : Newtown 

Geography : Ceredigion, Powys, North  Pembrokeshire and Carmarthenshire Group Chief Executive : Steve Jones Group Board Chair : Stephen Cripps Subsidiaries : Care and Repair Powys; EOM;  The Care Society 

Barcud Group Strategic Objectives

• To provide 5,000 affordable, mixed tenure, high quality sustainable homes in Mid  Wales by 2025 

• To be an excellent community landlord, which also offers support and care services • To be a tenant focused social business, which involves customers at all levels and  operates bilingually 

• To support the work of local authorities and the Welsh Government to prevent and  tackle homelessness in all its forms 

• To be an employer of first choice that supports the local economy and communities • To be a sustainable, low carbon organisation 

• To be an organisation with robust governance and finances 

For further information, please contact: Janice Thomas, Communications  Officer, Barcud 01570 424392