Delighted to share the news that our strategic partner, Peabody have recently agreed a £75m five-year sustainability-linked revolving credit facility with ABN AMRO Bank UK.
The new bilateral loan is uniquely structured, specifically to function so that the interest due will reduce if they manage to implement each of the following ESG objectives:
- Improvement in the environmental performance of existing homes
- Building new social and affordable homes to rent
- Increase the ethnic diversity of their leadership team (the first time we have agreed an employee focused metric with a lender)
The transaction follows a 12-year £350m sustainability bond issue in February and is its fourth sustainability-linked facility. Our other sustainability-linked loan agreements with lenders incentivise affordable childcare places, electric charging points on their estates, improving the environmental performance of homes, and creating opportunities for young people through a Peabody Fellowship programme.
The loan is ABN AMRO’s first sustainability-linked transaction in the UK Social Housing sector and is in line with the bank’s corporate strategy to grow its franchise in countries across north-west Europe.
The bank was an early advocate and adopter of sustainable and ESG finance and plays a leading role in the Dutch social housing sector supporting many social housing corporations across the Netherlands. These corporations face similar challenges in reducing their carbon footprint as do UK not-for-profit housing associations with many owning and managing older and ageing estates in large cities.
Anthony Marriott, Director of Treasury & Corporate Finance for Peabody said: “The metrics agreed in this transaction closely align with our new strategic priorities following our merger with Catalyst. We are all about people, placing equality, diversity and inclusion at the core of our culture in the new organisation. We will take positive steps to ensure the ethnic diversity of our leadership team better reflects the communities we serve in the years to come, and this is reflected in the agreement.
“We’re also passionate about our sustainability journey, building new homes to a high standard and investing in improving the environmental performance of our existing homes. The partnership with ABN AMRO will help us accelerate this as well as supporting the delivery of more affordable homes and placemaking activities in London and the home counties.”
Gerben Dragt, ABN AMRO Bank UK’s Country Executive said: “We are delighted to support Peabody in meeting their social and environmental objectives. This new loan includes both sustainability and socially linked metrics that also align perfectly with ABN AMRO’s strong ongoing commitment to sustainability and having a positive social impact.
“The UK social housing sector faces challenges that go to the heart of society in terms of the quality and safety of housing as well as reducing carbon footprint. Like in the Netherlands, ABN AMRO can help UK providers improve the sustainability of their existing portfolios and support their journey to net-zero.”
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