ÐÇ¿Õ´«Ã½

Orbit Housing Group is finalising a refinancing deal that will save it £2.5m a year.

The deal – the sector's second-biggest refinancing agreement – is worth a total of £348m. It consists of a recently completed £298m loan with a Nationwide-led syndicate, including Barclays, Britannia and Coventry ÐÇ¿Õ´«Ã½ Society, and a £50m loan with another, unnamed, organisation, expected to be complete in June.

It comes in just a fraction behind Anglia Housing Group's £352m facility with Royal Bank of Scotland, Nationwide, Britannia, Abbey National and the Bank of Scotland, signed in October last year.

Orbit's member associations have changed their rules to allow the use of fixed-interest derivatives with Dexia, Barclays and Lloyds TSB to pay the group's interest to the Nationwide syndicate.

Orbit's group finance director, Claire Davis, said a combination of reduced margins and new liable rates could save £2.5m a year, while the derivatives alone could save about £50,000 a year.

She said: "The resources will be available to invest in opportunities such as additional improvements to existing homes and new developments, particularly in our homelands around Milton Keynes and Thames Gateway."

The benefits to the group so far have been reduced margins, new longer-term fixes at current low rates and improved financial covenants giving extra flexibility.

The deal also reduces the number of lending relationships the group has and gives it extra investment capacity, starting at £2.5m a year.

The group comprises three associations: Orbit Housing Association, a low-cost homeownership subsidiary Orbit First Step and Orbit Bexley, a stock transfer association.

Nick Taylor, corporate housing manager at Nationwide, said: "Dealing with three separate associations with three separate boards means there are slight variations in what will be appropriate for each."