Pension Insurance Corporation (PIC) has entered a £100m private placement with Accord Housing Association to finance the construction of homes in the Midlands.
Accord currently offers a portfolio of 13000 homes and a range of support and care services to more than 80,000 people in central and northern England.
The placement offers the housing association a deferred drawdown to reduce its borrowing costs.
For PIC, the deal offers a range of maturities of up to 30 years, in a bid to march its pension liabilities in periods where cash flows in public bond markets may be difficult to source.
Marno Jooste, debt origination manager at Pension Insurance Corporation comments: “Sourcing long-dated cash flows is important to PIC as we look to back our long-term pension liabilities. Investing in social housing and other illiquid assets allows PIC to generate enhanced yield, helping us to secure more pension liabilities.”
This, in turn, means more trustees can guarantee their members’ pensions through buy-ins and buyouts, greatly improving their financial security in retirement” he adds.
Over the last year, PIC has conducted a number of similar investments. In July last year it invested £60m with a housing association in High Wycombe, followed by similar placements of £40m in Haltorn Housing in January and a further £60m in London-based Phoenix Community Housing in April.