Pensions Insurance Corporation has invested £35m in secured debt issued by Herefordshire Housing, a non-profit group which provides home and support services to people across the area.

The transaction of the £35m worth of retained bonds will be staggered over the next two years and funding will help to provide 330 new properties in Herefordshire and surrounding areas. Similar to former PIC social housing investments, this phased draw-down structure will benefit Herefordshire Housing through certainty of funding costs.

The DB specialist insurer has invested in social housing through 2016 and has invested over £600m in the sector to date.

Herefordshire Housing CEO Peter Brown said: “We have an ambitious strategy to grow our housing stock by 1,000 by 2020, providing more homes in Herefordshire for those in need. This bond sale gives us the platform to increase the rate of development.”

Pension Insurance Corporation debt origination analyst Elizabeth Cain said: “We are delighted to work with Herefordshire Housing to help achieve its growth ambitions. The ability to offer a forward purchase of retained bonds is just one example of how we continue to work with borrowers to offer flexibility in funding structures.”

TradeRisks, who arranged the transaction associate director John Coleman commented: “This innovative transaction has enabled Herefordshire to secure long term funding, in an attractive market, whilst managing its cost of carry.”

In September 2016 PIC published a white paper titled How institutional investors are investing in local communities, which aims to outline investment best practice through housing associations in order to be used and developed more widely.

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