Thursday 25 July 2019

UK Housing Association Optivo's sustainability-linked loan shows how a tailor-made financial solution can help unemployed residents.


Financing sustainable corporate development 

Optivois a charitable housing association which owns and manages 44,000 homes across London and the UK, with social impact at the core of its business. Chief Financial Officer Sarah Smith puts it this way: "Our full commitment is to building homes, making places and enhancing lives."

Optivo committed to help unemployed residents back to work by offering education and work-ready training programmes in households and communities. The charity plans to create thousands of employment opportunities in the sectors of security, construction, beauty and hospitality.

Sustainability-linked loans: a tailor-made credit facility

Supporting our client's vision for positive social impact, BNP Paribas provided Optivo with a new five-year £50 million credit facility, structured as a sustainability-linked loan (SLL). SLLs are typically for general corporate purposes and incorporate a pricing mechanism linked to a client's environmental, social or governance (ESG) performance. 

In the case of this sustainability-linked loan, Optivo will benefit from a lower interest rate margin if it gets over a predefined number of unemployed residents into work or supports them with work-ready training.  This target rises incrementally over the five-year life of the loan. There is an option to increase the size of the facility to £75 million, as well as to extend its term.

Expected social impact of this sustainability-linked loan

Optivo will use the loan for general corporate purposes and will reinvest savings made on the interest rate to help provide employment support. Participants in the work-ready training programme will benefit from a three-stage development approach based on an 'end to end' employment support pathway.

Simon Gates, UK Head of Corporate Coverage and Transaction Banking at BNP Paribas, concludes: "Ultimately, thanks to Optivo's focus on employment, this sustainability-linked loan is about getting people back into work, which is good for individuals, families, the economy and society.  It's a business model that BNP Paribas supports, with this deal being the second SLL we've structured in the UK Housing Association sector in the last 12 months."  

Rate this article :
0
0
0
0
 
 

Give us your feedback

Please validate CAPTCHA.

RELATED ARTICLES
esb-targets-energy-transition-with-first-irish-utility-sll

Electricity Supply Board signed a new €1.4bn sustainability-linked loan targeting decarbonisation, marking the first SLL for an Irish utility.

high-yield-and-leveraged-finance-bulls-bears-and-esg
More than 1,000 market participants gathered at BNP Paribas' flagship annual conference to discuss the...
More than 1,000 market participants gathered at BNP Paribas' flagship annual conference to discuss the prospects and the...
what-s-new-in-the-sustainable-capital-markets-
Our specialists debate the growth of the sustainable capital markets – and how transition bonds will...
Our specialists debate the growth of the sustainable capital markets – and how transition bonds will address the challenges...
the-onward-march-of-sustainable-lending-in-uk-public-housing
Clarion's sustainability-linked loan is the fourth arranged by BNP Paribas for a UK housing association...
Clarion's sustainability-linked loan is the fourth arranged by BNP Paribas for a UK housing association in two years...
eurazeo-becomes-first-private-equity-firm-to-announce-syndicated-sll
The margin on Eurazeo's loan is linked to sustainability key performance indicators, marking a milestone...
The margin on Eurazeo's loan is linked to sustainability key performance indicators, marking a milestone move towards greener...
close
{POPUP_CONTENT}