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Large landlord secures £75m funding linked to staff sickness levels
A large Midlands-based housing association has secured a new £75m revolving credit facility (RCF) with an interest rate partly linked to cutting staff sickness levels.
Bromford, which operates around 44,000 homes, has agreed the sustainability-linked RCF with ABN AMRO, the Dutch lender.
The bank has been increasing its exposure to the UK social housing sector, but this is its first agreement with Bromford.
Under the terms, Bromford will pay a lower interest rate if it meets its target to cut the average number of staff sick days from nine to 6.5.
Jennifer Chance, head of people at Bromford, said: “The well-being of our colleagues is a key priority at Bromford, and we are focused on reducing our colleague sick days.”
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The RCF interest rate will also be reduced if the landlord hits a target of coaching 1,400 tenants into employment or training by 2028.
Bromford did not disclose the standard interest rate on the RCF or what it might be reduced to if the targets are met.
An option to increase the facility by £50m is also available, Bromford said. The landlord said this would offer it flexibility to hit its target of building 12,000 new energy-efficient homes by 2023.
The deal is part of Bromford’s strategy to build up an RCF base of around £350m this year as its existing facilities expire.
Imran Mubeen, Bromford’s director of treasury, said: “We’re delighted to expand our credit lines to a fifth provider, as we continue to drive diversity in our funder base.
“Our enhanced RCF portfolio will allow us to respond to new market opportunities as they emerge.”
Earlier this month, the landlord revealed it had updated its sustainable finance framework, which it hopes will link to more than £1bn of future funding related to environmental, social and governance factors.
For ABN AMRO, the loan deal is the latest in a string it has signed with UK housing associations.
In April, Vivid secured a £100m RCF from the bank. ABN AMRO was also among a number of lenders that helped Sunderland-based landlord Gentoo restructure its loan book earlier this year.
And in May last year it agreed to lend £75m to Peabody, with targets linked to the diversity of its management team.
Richard Smith, director of corporate and investment banking coverage at ABN AMRO UK, said: “ABN AMRO is delighted to begin a new lending relationship with a sector-leading housing association like Bromford and to be further extending our support to the sector.”
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