Housing association lands £127m worth of funding
Gloucestershire housing association Bromford has landed funding worth £127m.
The sustainability-linked revolving credit facilities with two UK banks will finance ongoing investment in new and existing homes and deliver our sustainability objectives.
The five-year funding deals are for £75m with Lloyds Bank and £52m with Barclays.
Director of treasury Imran Mubeen said: “We’re delighted to have strengthened our existing relationships with both Lloyds Bank and Barclays who remain two of the leading funding banks for UK social housing.
“We have now delivered over £350m of new funding this year, all through our sustainable finance framework, which will enable us to support our customers through the rising cost of living; retrofit our existing homes as we continue to pursue our own decarbonisation agenda; and deliver 12,000 new low carbon, affordable homes by 2031.
“Having previously established the first green and governance loans in the sector, we are particularly pleased that our new facilities with Lloyd’s Bank and Barclays are sustainability linked, with customer focused targets that align to key areas of our corporate strategy 2023-2027.”
He added: “We understand why there is growing scepticism over the long term viability of Sustainability Linked Loans (SLLs) in our sector as the requirements of the Loans Market Authority now demand even more commitment, disclosure and investment from housing associations.
“Some of our peers have chosen to drop sustainability linkage on their new facilities but we believe that SLLs can endure if the demands of the regulator and funders are proportionate to the potential savings offered, which we can re-invest into our communities. When setting disclosure requirements, we believe that funders need to recognise the inherent social value and positive environmental impact our sector delivers through our core business, in contrast to other sectors who are looking to prove their ESG credentials which are less obvious and direct. We are pleased to have achieved this balance with Lloyd’s Bank and Barclays on these loans so the true benefits of sustainable finance are realised – driving greater visibility and accountability of delivery against our Bromford-led sustainability commitments.”
Under the terms of the agreement with Lloyds Bank, Bromford willl measure against the number of new social rent homes it builds over a four-year period. We have been one of the top three builders of new social rent home in England in each of the last three years* and will receive a discount on our interest payments if it builds 2,200 social rent homes by 2028.
Development director Amanda Swann said: “Building homes for social rent has been a key component of our development programme for a number of years and remains a key pillar of our strategy going forwards.
“Everyone deserves a secure and safe home that is affordable to them and social rent is the lowest cost tenure available to customers.
“There are tens of thousands of people on the waiting lists for housing in the areas in which we operate and we are committing to playing our part in alleviating this by building affordable new homes. In the past three years we’ve built 1,375 social rent homes and now the terms of the Lloyds loan will support us to build even more as we expand our development programme over the coming years.”
The Barclays deal is also linked to a key performance indicator (KPI), related to us achieving a customer advocacy score of 87.5% by March 2028. In 2022-23, our customer advocacy score was 83%, which had increased from 79% the previous year and the deal with Barclays has a number of stepped targets for each year leading to 2028 that are aligned with our strategy.
Head of insight Helen Lloyd added: “Customer advocacy is one of the key tools we use to measure whether customers are happy with the services they receive from us. It’s a holistic measure that aggregates the feedback scores from nine of our service areas from neighbourhood coaching to repairs and new homes. For our customers to thrive in their homes it’s important that we ensure we provide the best possible service that we can and linking our advocacy score to this Barclay’s loan will ensure that we continue to strive to do this over the years ahead.”
Ray Tierney, relationship director and regional head of housing at Lloyds Bank, said: “The team at Bromford’s commitment to investing in sustainable, affordable homes and the people who live in them is clear. We’re proud to support its continued development of energy-efficient properties across two large areas of the country, which is helping to accelerate the green growth of communities.
“Their work also aligns with our group call, alongside our charity partner Crisis, for one million new social homes to be built over the next decade.”
Alison Gray, director of Public Sector Debt Finance at Barclays Corporate Bank said: “The Barclays Social Housing Team are delighted to have worked with long standing client Bromford Housing in the delivery of a new sustainability linked RCF line. Importantly for both Bromford and Barclays was the introduction of meaningful measures, directly reflecting Bromford’s ESG strategy and linking to Customer Advocacy and Scope 1,2 and 3 emission reductions.”
Legal advice was provided by Trowers & Hamlins LLP, and Addleshaw Goddard LLP.
