Affordable Homes Guarantee Scheme 2020

Tender description

In 2012, the then Chancellor announced a 10 000 000 000 GBP housing debt guarantees programme. 3 500 000 000 GBP of that allocation was made available for affordable housing (resulting in the Affordable Homes Guarantee Scheme 2013, or AHGS 2013) and 3 500 000 000 GBP to support the emerging Build to Rent sector (resulting in the Private Rented Sector Guarantees Scheme, or PRSGS). 3 000 000 000 GBP was to be held in reserve for either scheme according to demand. Both AHGS 2013 and PRSGS were debt aggregator services run by an external delivery partner under Licence from MCHLG. The delivery partner promoted the scheme, processed applications and acted as the debt issuer, having raised debt from the capital markets. AHGS 2013 was generally well received by borrowers, through providing long-term, low-cost and fixed rate finance. At Spring Statement 2019, the Chancellor announced a new 3 000 000 000 GBP Affordable Homes Guarantee Scheme (to be termed AHGS 2020) which is the subject of this PIN. Lot 1: MHCLG and Homes England intend to carry out a Pre Tender Market Engagement Exercise, the purpose of which is to: — help define the requirement, — help provide a better understanding of the feasibility of the requirement, — understand the best approach, — understand the capacity of the market to deliver and possible risks involved, and — provide the market with an opportunity to ask questions, raise queries and any issues to be addressed at an early stage. High Level outline of the project outcomes: 1) The supplier of this requirement will act as the Authority’s delivery partner to provide a debt aggregation service that will enable not-for-profit and for-profit private registered providers to develop additional, new-build homes for affordable and social rent and/or affordable home ownership. If an appointment is made, the supplier will operate the scheme under a Concession Agreement from the Authority. 2) The AHGS 2020’s objective is to reduce the overall finance costs to borrowers to support them to deliver a greater number of additional, new affordable homes than they would otherwise have done. MHCLG will provide a guarantee, covering full repayment of principal and interest, in respect of both: — the payment obligations of a borrower pursuant to a loan from, or arranged by, the successful bidder, and — the payment obligations of the successful bidder, or a vehicle established by the successful bidder, in respect of any capital raised for the purpose of on-lending to one or more borrowers. 3) The successful bidder (who will owe a duty of care to MHCLG) will be required under the terms of the concession agreement to: — promote the scheme to eligible borrowers, — manage the raising of finance from the capital markets (likely to be listed debt securities) and on-lend the proceeds to approved borrowers, — process applications from loan applicants, undertake due diligence, credit assessment and risk assessment, — provide such management information and stress testing analysis as may be required under the terms of the Concession Agreement, and — during the term of the loans, perform facility agent-type services such as processing any waivers or amendments and monitoring ongoing reports and certificates received from the borrowers. 4) Provision of the guarantee for each loan, or any capital raised for the purpose of funding a loan, will be subject to MHCLG approval which will take account of the eligibility and purpose of the loan, and satisfaction with and approval of the risks of the individual borrowing. Of key importance to HMG is the maximisation of the benefit of the guarantee in reducing the cost of borrowing and supporting the development of new affordable homes. Further information can be found at https://dclg.bravosolution.co.uk Potential suppliers may raise questions or seek clarification regarding any aspect of this PTME document before 12:00 noon on 22.7.2019. Questions must be submitted by the ‘Messages’ function in PQQ_8 Affordable Homes Guarantee Scheme 2020 on Bravosolution. To use this service: — register for a free account at https://dclg.bravosolution.co.uk — click the 'PQQs Open To All Suppliers' link (these are selection questionnaires (SQ) open to any registered supplier), — click on the relevant PQQ to access the content. PQQ_8 Affordable Homes Guarantee Scheme 2020, — click the 'Express Interest' button at the top of the page. This will move the PQQ into your 'My PQQs' page (this is a secure area reserved for your projects only). You can now access any attachments by clicking 'Buyer Attachments' in the 'PQQ Details' box, — click 'My Response' under 'PQQ Details', you can choose to: —— 'Create Response', or —— 'Decline to Respond'. You can now use the 'Messages' function to communicate with the Authority and seek any clarification. Date response required: 12:00 noon (GMT) 24.7.2019. — register for a free account at https://dclg.bravosolution.co.uk — click the 'PQQs Open To All Suppliers' link, — click on the relevant PQQ to access the content, — click the 'Express Interest' button at the top of the page. This will move the PQQ into your 'My PQQs' page. You can now access any attachments by clicking 'Buyer Attachments'.