Assured Guaranty supports UK student housing lending
A subsidiary of Bermuda-based holding company Assured Guaranty Ltd has guaranteed principal and interest payments on £113 million of bonds issued by ULiving@Essex3 LLP.
Assured Guaranty UK Limited said the bond issuance will finance the construction of new student accommodation at the University of Essex in England.
The company said the 45-year bonds were sold to UK investors and distributed in two tranches of fixed and index-linked debt, and reached financial close, taking advantage of low, long-term rates. The bonds are expected to be rated AA by S&P Global Ratings by virtue of the guarantee from AGUK.
The bonds will finance the design, build and operation of 1,262 bed spaces in five new accommodation blocks at the university’s Colchester campus.
The new accommodation will add to the university’s existing portfolio by increasing the number and mix of en suite rooms as well as creating a small number of studios, and in general will enhance the on-campus accommodation offering to students, the company said.
The transaction represents the third successful student accommodation financing guaranteed by AGUK for the University of Essex.
Dominic Nathan, managing director, AGUK, said: "We are delighted to have closed a third student accommodation financing with the University of Essex, demonstrating the value of our wrapped financing solution in providing an efficient form of financing for projects of this type.
“Despite challenging market conditions generally and unprecedented overall public health and economic circumstances, our collaborative approach with the university and sponsors, along with investor demand for AGUK wrapped debt, has resulted in a successful deal for the university.
“We believe investors, whether direct lenders or bond purchasers, value the high rating and associated low capital charges our guarantee adds to long-term financing, along with the efficient asset-liability matching this type of investment can provide.”
AGUK said it guarantees timely payment of scheduled principal and interest to holders of debt instruments throughout the life of the debt, in accordance with the terms of its financial guarantees.
AGUK provides its financial guarantee together with a co-guarantee from its affiliate Assured Guaranty Municipal Corp.
Both AGUK and AGM are subsidiaries of island-based Assured Guaranty Ltd.
Through its subsidiaries, Assured Guaranty provides credit enhancement products to the US and international public finance, infrastructure and structured finance markets, and also provides asset management services.