Legal & General is providing a £51m, 10-year, fixed-rate debt facility to the LNT Group, whose businesses include Ideal Carehomes. L&G’s loan – the insurer’s first to the care home sector – refinances some of LNT’s bank debt, releasing capital to help fund Ideal Carehome’s plans to build six to eight new homes a year.
It is secured on LNT’s 36- strong portfolio of mature UK care homes, all of which have been purpose-built since 2009. L&G has invested directly in care homes, forward funding five with Care UK for £31m earlier this year and buying 13 care homes let to Methodist Care Homes for £70m at the end of last year.
LNT chairman Lawrence Tomlinson said LNT “was impressed with L&G’s sector knowledge and ability to structure terms that are tailored to our maturing business. “Dealing with L&G was a lot easier than dealing with banks, as you’re dealing with a long-term partner who is not looking to renew the facility in three years. No matter how good a bank is, refinancing is a hassle – not just the costs, but the management time.”
Alex Gipson, L&G’s lending manager, said the fact that the homes are purpose-built to a high standard was important to L&G. “You can’t future-proof completely, but if you lend for 10 years you need to know the asset will be generating a good income in 10 years’ time.”