Aviva lends £154m in public/private partnership deals

Aviva Commercial Finance has issued three loans totalling £154m for the development of new healthcare and educational facilities in the UK.

The loans, which closed just before Christmas, have long-dated income that match the liabilities of group clients including the Aviva annuity business.

Barry Fowler, managing director of Aviva Commercial Finance who was recruited from Lloyds last June,  said: “We have a strong appetite for providing long term, fixed rate debt across a number of sectors, and these schemes represent a good long term investment for us and our customers”.

The largest of the trio is a 25-year, £67m loan to Riverside Care and Support to construct 316 extra care apartments at three locations for Hull City Council.

The second is the provision of £48m to hub North Scotland (Wick) for the development of a new high school with community facilities, and a primary school wing in Wick for The Highland Council. The development will be carried out by Galliford Try Building and the new school is scheduled to open in September 2016.

The final deal is a 26-year, £39m loan to hub East Central to build a new school in Levenmouth, Scotland, which will accommodate 1,800 pupils. It is scheduled to open in August 2016.

Aviva, which makes mainly fixed-rate, bilateral loans at terms from 5-35 years, wrote over £1bn of gross new business in 2014 and Fowler said the second half of the year was particularly busy. Six commercial loans totalling £230m closed in December including loans for Helical Bar and private property company EPIC.

Aviva also kept the cashflow from a loan originally made to the Noe family secured on the ‘Bridgett’ portfolio when the assets were sold to Kennedy Wilson Europe after Aviva foreclosed. Aviva provided stapled finance of £352.3m and acquired a new client relationship.

In addition during the year, the business moved into financing social housing for the first time.

“We’re particularly pleased that we’ve been able to finance our second social housing project in 2014 and to strengthen our relationship with the Scottish hub projects” Fowler commented. ” Aviva is committed to supporting local communities and infrastructure and these projects are great examples of this.”