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Bromford eyes sustainable financing after completing first ESG-linked deal
One of England’s largest housing associations has pledged to pursue more sustainability-linked funding deals after completing its first such agreement with NatWest this week.
Bromford, which owns or manages 43,000 homes across the Midlands and the South West, agreed a £50m revolving credit facility with NatWest over a 10-year period.
This is its first debt facility to carry an environmental, social and governance (ESG) wrapper, meaning the margin on the loan will lower if Bromford successfully meets pre-agreed environmental targets related to the energy efficiency of its existing homes.
Imran Mubeen, head of treasury at Bromford, said the deal fitted with the organisation’s wider goals and that lenders had been very receptive.
“We’re continuing to speak to funders about other ESG-linked deals,” he said.
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“We aim to reduce our impact on the environment and combat the effects of fuel poverty, putting more money back into the pockets of our customers.
“We’ve also proactively sought to bring in new funding at sector-leading rates to optimise our loan book. We are delighted to bring these two aspirations together.”
Bromford will invest the savings it makes on the loan into initiatives such as its YouCan Foundation which awards grants to customers and local initiatives.
Other landlords have taken similar steps to include sustainability in funding deals, with a number of organisations such as L&Q and Peabody recently linking funding to social goals such as employment support and childcare qualifications.
Last week, Clarion Housing Group announced a sustainability linked loan.
Mr Mubeen added: “It was important to establish the loan on the most competitive terms without dilution for the ESG link, as well as working with a key banking partner like NatWest who understand our business model and aspirations to deliver 13,000 new homes by 2028.”
This was NatWest’s first ESG-linked loan to the housing sector.
Hedley Hadfield, director of housing finance – commercial banking at NatWest, said: “It’s a growing market for us and we’re thrilled to assist Bromford and other providers in meeting their sustainability targets.”
