Major Japanese finance deal shows Midland Heart means business
Midland Heart has established a reputation as an organisation to do business with globally, securing a £60m finance deal with a major Japanese bank.
The loan from Sumitomo Mitsui Banking Corporation (SMBC) follows news that we've retained our A1 Stable credit rating from Moody’s – one of only a handful of UK housing providers to achieve this ranking.
Together, it shows that social housing is increasingly viewed as a safe bet for investors worldwide who want to lend to an organisation that will provide good returns on their money.
Joe Reeves, Executive Director of Strategy and Planning, said: “We’re thrilled to have retained our A1 Stable rating and secured this finance from SMBC, which will fund the development of high quality affordable housing across the Midlands.
“As a not-for-profit organisation that stays true to our social purpose of providing genuinely affordable homes, it’s very important that we can borrow on the best possible terms and give our customers good value.
“It’s encouraging that both Moody’s and our new financial partner SMBC recognise the value of affordable housing as a product to invest in. Not only do our homes have guaranteed occupancy and offer a very stable income for investors, they also serve an important social purpose in providing much-needed accommodation for families across the Midlands.”
In order to maintain our A1 Stable rating, we needed to demonstrate continued financial discipline, which for 2019/20 included posting our best-ever operating surplus of £77m with an operating margin of 35%.
It went in our favour that we continue to focus on our core role of social lettings rather than developing for-sale properties, which are subject to market fluctuations and more of an investment risk.
During the most recent assessment period we also launched a new corporate plan – Making What Matters Brilliant – which sets out our ongoing commitment to building new affordable homes, continually improving existing stock and providing excellent customer service, while striving to become an employer of choice.