Leading law firm Shepherd and Wedderburn has acted on behalf of Bank of Scotland plc and Her Majesty’s Treasury in relation to new revolving loan note facilities of up to £86m to Countesswells Development Ltd (a subsidiary of the Stewart Milne Group Ltd). The financing will be used to fund the development of a major infrastructure and housing project just outside Aberdeen.
A first deal of its kind in the UK, innovative funding techniques were employed to underwrite this ambitious project which will see the construction of 3,000 new homes together with attendant infrastructure development and the creation of 1,000 new jobs. The value of the completed development is expected to be in excess of £800m.
Designed to reduce risk to lenders and to kick-start projects of this magnitude, use of the UK Infrastructure Guarantee Scheme was announced yesterday in Aberdeen by Andrew Dunlop, Scotland Office Minister. He commented:
“The UK Government is offering this guarantee to allow this major Aberdeen project to go ahead. This is a great example of partnership working where the government can unlock the capital and the potential of the development.
This part of Scotland is facing some stiff challenges but today’s announcement is a vote of confidence in the North East by the UK Government and those involved in the project.”
Countesswells Development will issue revolving loan notes to Bank of Scotland, with the debt repayment being guaranteed by the Treasury under the Infrastructure UK Guarantee Scheme. Paul Hally, Banking & Finance Partner, Shepherd and Wedderburn, who led the team advising the Treasury, said:
"We are delighted to have played our leading role in structuring this innovative financing for this nationally significant project, underscoring the work we do in the infrastructure and particularly housebuilding sector."
Alasdair Gardner, Bank of Scotland Regional Managing Director Scotland - Commercial Banking commented:
“The Countesswells development is a key project for Aberdeen and the North East and we are delighted to be working with the UK Government to fund it. We are committed to supporting the housebuilding sector and this deal demonstrates one of the innovative funding options that is available to help build the many new homes Scotland needs.”
Countesswells further builds on Shepherd and Wedderburn’s equally impressive work on other ground-breaking infrastructure projects in the region and across the UK. The firm recently acted for the senior creditors on the £745m Aberdeen Western Peripheral Route, a project being delivered in partnership by Transport Scotland, Aberdeen City Council and Aberdeenshire Council.
In 2015 the firm advised Amber Infrastructure and the Amber Green Spruce Fund in arranging a loan facility to allow work to start on the University of St Andrews’ £25m green energy centre on a 36-acre site of a former paper mill at Guardbridge, which followed a financing from the same fund for enabling works on the £200m redevelopment of the Haymarket site in Edinburgh.
Patrick Bell, Banking & Finance Partner at Shepherd and Wedderburn commented: “We are very glad to have advised on this ground-breaking deal for Countesswells, acting for our long-standing client Bank of Scotland. This is one of a series of major infrastructure projects the firm has advised on recently for banks and funds in one of our core sectors.