Third social housing project bond to launch

UK-based special purpose vehicle Solutions 4 North Tyneside (Finance) PLC has announced plans to issue £76 million (€92 million; $127 million) of senior secured fixed-rate bonds due 2041 in support of the £300 million North Tyneside “Quality Homes for Older People” Private Finance Initiative (PFI).

This will be the third UK social housing project bond issued in less than six months, following those for the Leeds and Brunswick PFIs. According to rating agency Standard & Poor’s (S&P), “close to £500 million has been raised from UK insurers to fund social housing in the capital markets in the past few months” including unrated transactions.

Lloyds Bank is acting as lead arranger for the transaction and Assured Guaranty as financial guarantor. S&P said the involvement of Assured Guaranty “shows that the monoline model [popular pre-2008 but which dried up in the wake of the Crisis] is still healthy”.

The proceeds of the issue will go towards the 28-year North Tyneside PFI, involving the provision and maintenance of 924 high quality sheltered housing dwellings, both new and refurbished, for older people across the North Tyneside metropolitan area of Tyne & Wear in north-east England.

The project is backed by UK fund manager Equitix and developer Miller Construction in partnership with North Tyneside Council.