A London-based housing association has agreed a £50m debt facility with Danske Bank as it looks to build around 1,000 new homes.
Origin Housing, which operates 6,900 homes across north London and Hertfordshire, said it will use the funds to build 1,089 new homes over the next five years, of which 80 per cent will be affordable.
The landlord, which was established in 1924 as St. Pancras House Improvement Society, will also use the funds to improve its existing stock, it said.
The interest rate on the facility and the term length were not disclosed.
Last May ratings agency Fitch downgraded Origin’s outlook from ‘stable’ to ‘negative’ because of an expected rise in the group’s debt-to-EBITDA ratios in the next five years.
In its last reported full year, to 31 March 2020, Origin posted group pre-tax surplus of £1.18m, down from £12.27m the prior year. Reduced operating surplus of £14.06m (2019: £25.9m) was largely due to “increased operating costs relating to fire safety, reduced asset disposal surplus and the reduction in fair value of investment properties”, the group said at the time.
Commenting on the funding deal, Gloria Yang, deputy chief executive and finance director at Origin, said: “This funding package will help us greatly with plans to deliver much-needed new stock to meet ongoing demand for social and affordable housing in the communities we serve in London and Hertfordshire.”
Origin is led by former Hyde executive Carol Carter, who joined as chief executive in 2017.
The deal is the second involving Northern Ireland-based Danske announced in just over a month. In March Manchester-based Irwell Valley secured a £50m loan from Danske.
Mark Canning, head of Danske’s corporate relationship team, reiterated that the deal was part of its growth plans to be “more active in helping the sector across the rest of the UK”.
Danske Bank was previously known as Northern Bank – one of Northern Ireland’s oldest financial firms – before taking on the name of its Danish parent when it was acquired in 2012.
Update: at 2.44pm, 14.04.21
This article was amended to correct Origin’s 2020 group financial figures, which were previously incorrectly stated.