Addleshaw Goddard has acted for the Arranger (The Royal Bank of Scotland plc) and mandated Investor (M&G Investments Limited) on the first own name debt capital markets issue by a Scottish Registered Social Landlord.
The deal, which completed on Thursday 27th March 2014, saw Link Group issue £45,000,000 senior secured notes, which will be used to fund Link Group's extensive and ongoing social housing development programme.
Notwithstanding the Scottish domicile of the Issuer, Link Group, the Note Purchase Agreement and incidental bond documents were all governed by English law. Addleshaw Goddard managing associate Gary Grigor led the transaction, assisted by Natalie Swales, under the supervision of Lee Shankland, Head of Housing Finance.
Scottish law security advice to the Investor was provided by Maclay Murray & Spens (Chris Dun).
Addleshaw Goddard's Head of Housing Finance, Lee Shankland, commented:
"Gary and Natalie deserve full credit for delivering such a ground breaking transaction.
The bid process overlapped with the political and economic debate surrounding Scottish independence and the Scottish currency, post any "yes" vote, creating a very unique currency risk which required some very novel drafting in the bond documentation to reassure potential investors. Its also notable that the transaction closed after the Chancellor's recent budget announcements on pensions/annuities, which also knocked investor confidence generally.
This deal underpins growing investment appetite for residential property. In many respects, the inflation-linked performance of social housing offers a high level of certainty often not associated with direct property investment and being able to unlock finance in this way will be crucial to the further development of the sector. This is a highly significant deal, particularly given the current uncertainty around Scotland’s future, but highlights the attractiveness of social housing as an institutional investment asset as investors chase long-term, low-risk holds."
He added: "The comments from Neil Hall are outstanding – it’s the approach which Addleshaws like to take on all transactions. Gary and Natalie have done themselves and the firm very proud."
Neil Hall, Director of Finance and Corporate Services at Link Group commented:
“I was really very impressed indeed by the work Gary and Natalie did in pulling the deal together and how well they tackled and addressed matters.
Although Addleshaw Goddard was representing the interests of the investors it often felt like they were acting for Link as they co-ordinated and project managed the entire process from beginning to end. They worked very hard to ensure that every base was covered so that the transaction could be concluded on time. This was very much an added value, which was essential, but it also created and engendered a team spirit of all the parties working to a common goal, rather than two sides trying to do a deal.”
Link Group were advised by Harper Macleod (Derek Hogg), with Burness Paull LLP (Caroline Drummond and Scott Wilson) acting for Link Group on the Scots law property related matters.
