Plus Dane pushed back repayment dates on “a significant amount” of its £350m loan book following renegotiation with main funders ahead of last year’s group restructure.
The north-west landlord regained its top regulatory ratings – G1 and V1 for governance and viability – in late March following a four-year turnaround. That turnaround culminated with the collapse of its two registered provider subsidiaries when Plus Dane Cheshire and Plus Dane Merseyside back into the single group entity.
The new corporate structure required approval from the 13,000-home landlord’s main lenders: Barclays; Nationwide; RBS; and Santander. Under the terms of the new loan agreements, several large repayments due in either the 2018/19 or 2019/20 financial year were deferred.
John Kent, Plus Dane’s executive director of finance, said: “To do that [restructuring] project we needed funder consent. As part of achieving that, we were able to renegotiate a number of our loans which took out some quite short-term and quite large repayments and move them back two or three years.”
Mr Kent said the deferral of payments on what he described as a “significant amount” of the landlord’s £350m bank debt gave it “an opportunity to prepare our strategy for our loan profile going forward”.
Loans falling due before the end of 2019/20 are now payable in either 2021 or 2023, according to Mr Kent.
The renegotiated loans have also given Plus Dane extra headroom after gearing covenants formerly based on reserves and grant were replaced by ones based on the historic cost of property.
Looking ahead, Plus Dane will reevaluate its funding requirements once it has decided on the size of its development programme.
Mr Kent said he would not rule out going to the bond market in future, now that the association has regained its top viability rating.
He said: “It certainly would be on the table. We’ll look at all sources of finance and capital markets would be one of them. I’d hope that the V1 G1 would help. It’s also about establishing more of a track record. That will help us going to the capital markets as well as the traditional banks.”
In returning Plus Dane to a V1 viability rating in March, the Regulator of Social Housing (RSH) said that it was assured that the group’s financial plans “are consistent with, and support, its financial strategy”.
It added: “The provider has an adequately funded business plan, sufficient security in place, and is forecast to continue to meet its financial covenants under a wide range of scenarios.”
Part of the wider restructure was the unwinding of the association’s commercial subsidiary Three60, which began in 2015.
While some assets of Three60 were still sitting on Plus Dane’s group accounts at the end of the last financial year (2016/17), Mr Kent told Social Housing that the last property owned by Three60 had been sold last year, with the company likely to be wound up later this year.