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Peabody borrows £75m from French bank to pay for childcare
London housing association Peabody has borrowed £75m from the French bank BNP Paribas to pay for an affordable childcare programme.
The 66,000-home social landlord borrowed the money as a five-year revolving credit facility, structured as a sustainability-linked loan.
This means that Peabody’s interest rate depends on whether it meets social impact-based criteria. It will pay a lower interest rate if it delivers an agreed number of accredited childcare qualifications under its childcare training programme.
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Its target for qualifications will increase incrementally over the five-year life of the loan.
Susan Hickey, chief financial officer at Peabody, said: “We know that the lack of flexible, affordable childcare in London is a major problem. It leads to lower rates of employment, disproportionately affecting mothers, and contributes to unacceptable levels of inequality and child poverty.
“Many working people find themselves burdened by debt from expensive childcare costs. Alongside BNP Paribas, we are determined help tackle this issue in our communities.”
David Reynolds, head of global markets at BNP Paribas, added: “BNP Paribas has had the privilege of working with three UK housing associations to provide liquidity through individually tailored sustainability-linked loans.
“Peabody is the first to use a childcare metric, while L&Q and Optivo were both linked to employment. For us, this is about partnering with housing associations for the long term and supporting their continued drive to improve residents’ and communities’ quality of life, health and well-being.”
