Legal & General (L&G) has agreed a £51m ($85.5) ten-year loan to the LNT Group, an owner and operator of care homes across the UK.
It is believed to be the first time that tailored bilateral institutional debt finance has been provided to the care home sector, according to L&G.
“We are extremely pleased to work with the LNT Group, providing the stable financing that clearly benefits a sector such as this and which traditional markets are now less likely to be able to provide,” said Laura Mason, director of direct investments at L&G Capital.
The loan is secured against a portfolio of mature care homes and will be used to refinance LNT’s existing bank debt, releasing capital to support the company’s plans for strategic growth.
LNT, parent company of Ideal Carehomes currently operates 36 homes across the UK and aims to build between six and eight new care homes per year, which would create around 500 jobs on an annual basis.
“Supporting our future growth, the long term facility not only gives the LNT Group stability but also releases necessary capital to underpin development opportunities and job creation,” said Lawrence Tomlinson, chairman of the LNT Group.
This deal forms part of L&G’s larger UK housing and infrastructure investment strategy. One of the six UK insurers committed to investing £25 billion in the UK by 2018, L&G has invested £5.5bn in UK infrastructure projects to date, including a range of supply side housing.
In Q1 2014, L&G agreed to forward fund and purchase five care homes in Suffolk with Care UK for £31m. L&G also acquired 13 care homes let to Methodist Care Homes for £70m in Q4 2013.
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