Local Space successful on-going growth programme required additional funding to purchase homes for London’s growing homeless population.
Funding Update February 2019 – the details
Local Space have reaffirmed its AA- credit rating with Standard & Poor (S&P) in February 2019. This means that Local Space remains one of only two registered providers with this rating and enables it to access competitively priced funding for future development.
The S&P rating is one of the reasons that make Local Space a good organisation for lenders to do business with. £80m was required to be in place by 31st March 2019. It was also desirable to smooth out the requirement for future refinancing. This has now been completed in the following way:
1. A £15m revolving credit facility (RCF) extension to the Barclays loan facility was completed in January 2019. This used up some surplus security Local Space already had and extended an existing loan facility for up to 7 years. This is a variable rate loan based on the LIBOR benchmark and can be used immediately if required.
2. Local Space obtained £50m loan finance from MORhomes and this was completed in February 2019 and funds were received. MORhomes is a new funding aggregator which itself received investment from corporate investors and has on-lent the money to Registered providers including Local Space.
This loan is unsecured initially but is required to have property pledged as security within 18 months, although Local Space intend to do this much quicker. The loan is on a fixed rate of interest which was benchmarked on a Government gild bond. The rate of interest is 3.67% but Local Space pay extra interest until the security is in place.
3. Local Space obtained a £15m extension to its Santander RCF which completed in February 2019. This also extends that facility for 7 years. The loan facility attracts variable rate interest based on the LIBOR benchmark.