Bernicia secures £75m capital markets funding

Bernicia invest £75m into business through capital markets funding. Chief Executive John Johnston and Finance Executive Director Janette Longstaff

Bernicia has secured £75m of funding from capital markets to back its bold plans to build more homes, support local communities and help deliver regional economic recovery.

Legal & General Investment Management – one of Europe’s largest asset managers – is the sole investor in the deal which is a huge vote of confidence in Bernicia’s financial strength as well as the wider North East economy.

The money will be released to Bernicia in three instalments over a two-year period.

Headquartered in Ashington with 550 staff, Bernicia has 16,000 properties across the North East with plans to build at least 650 new homes by 2023.

It turned to the capital markets to allow it to plan more long-term investment into development plans for the business.

Janette Longstaff, Bernicia Executive Director of Finance, said: “This important investment by Legal & General Investment Management (LGIM) allows us to secure long-term funding at very favourable rates thanks to our strong financial standing and excellent governance.

“It’s a real vote of confidence in Bernicia and the North East economy as a whole.

“It allows us not only to meet our corporate strategic objectives, but to go much further enabling us to explore strategic opportunities with our local authority partners, support local supply chains and create more opportunities for the people of the North East.”

Independent financial services specialist Centrus was sole financial advisor to Bernicia on the deal, while international law firm Trowers and Hamlins advised on the legal aspects which will underpin the funding.

Steve Bolton, LGIM Head of Private Corporate Debt, Europe, said: “This £75m investment in Bernicia marks another significant milestone for Legal & General’s investment in the North East, having recently committed £100m and £350m to landmark regeneration projects in Sunderland and Newcastle respectively.

“Legal & General is uniquely placed to invest annuity money into the UK economy, supporting its long-term pension commitments and creating real assets which provide jobs, housing, productivity and wage growth.

“Whilst we have seen a lot of change over the past few months, the fundamental need for good quality, affordable homes has not changed. If Covid has shown us anything, it’s that we all need a safe place to call home. Covid, and the actions taken to mitigate its spread, highlight the central role of the home in people’s lives.”

Sam Goldman Director at Centrus, said: “We are delighted to support Bernicia on this landmark transaction, representing the fundamental strength of their business, long-term strategy and their position in and support for the North East.

“The structure provides cost effective deferred funding, with flexible covenants, a foundation that further supports Bernicia in achieving its long-term strategy.”