On the go: The £3.2bn Merchant Navy Officers Pension Fund has signed a second buy-in with Pension Insurance Corporation worth £400mn.
This second buy-in with PIC covers the benefits of close to 2,000 pensioners. Willis Towers Watson advised on the transaction.
It builds on a previous £1.6bn transaction completed in February 2020, in which PIC secured the pensions of around 14,000 members by converting a longevity swap held between the scheme and Pacific Life Re.
MNOPF chair Rory Murphy commented: “This buy-in is a further key stage in our long derisking journey.
“This buy-in helps to provide greater certainty to members about the security of their benefits and we are delighted to have completed it with PIC, who we know well from our existing transaction.”
Last week, PIC announced two new investments. It completed a £128mn secured debt investment in the University of Birmingham, enabling it to transform its Pritchatts Park Student Village accommodation site into a 1,230-room, low-carbon residential facility.
The investment is inflation-linked and is PIC’s first investment linked to the consumer price index in the sector. The proceeds will be used to finance refurbishment of existing estate, construction of new rooms and their operations.
The deal uses a deferred drawdown structure, where the debt will be drawn down over three tranches during the construction period. The debt will mature in 2069, matching PIC’s liabilities.
PIC also announced a £130mn investment in build-to-rent development Wirral Waters One, which is part of the UK’s largest urban regeneration project.
WWO is the cornerstone residential scheme for the broader development of Peel L&P’s Wirral Waters, a 500-acre brownfield site and former dockland.
The project will transform the brownfield site into a sustainable location for local and international businesses, creating more than 20,000 permanent jobs for the Liverpool City region, as well as offering a breadth of new housing opportunities.
Working in close partnership with Peel L&P and Wirral Metropolitan Borough Council, PIC is the sole investor for the development of a build-to-rent scheme, comprising 500 one and two-bedroom apartments, with an affordable housing component of 100 homes.
The build-to-rent development will use a long-term, regeneration lease structure, providing funding for the council that would not have been available from traditional structures, while generating secure long-term cash flows to PIC to match its pension payments decades into the future.
Additionally, the development will target improvements in biodiversity, use a range of energy efficiency and low-carbon technologies, including solar power systems, air source heat pumps, and electric vehicle charging points, and utilise sustainable urban drainage systems to manage surface water from the site into the docks.
This content originally appeared on MandateWire.com
