Housing association Bromford has secured its fourth funding deal of the year with a new £75m deal with SMBC Bank International plc to support its homebuilding programme.
SMBC and Bromford have signed a five-year sustainable £75m Revolving Credit Facility. The funding is the first in the housing market which is linked to a governance metric, with the goal of reducing Bromford’s gender pay gap. If Bromford meets the agreed annual Key Performance Indicator (KPI) to continuously improve its gender pay gap from its existing median group level of 7.1%, it will benefit from a lower interest rate margin, with savings re-invested into community projects to support customers and enable its communities to thrive.
This is the first time Bromford has secured funding from a financial institution headquartered in the Far East, having secured its first overseas investment last year with a £100m private placement issued to investors in North America.
Head of Treasury Imran Mubeen (pictured above) said: “This new facility brings in a fourth provider of RCF into our loan book, which strengthens our liquidity, mitigates our counterparty risk and increases our access to funds from a diverse range of sources as we continue to deliver over 1,000 new homes a year. We are delighted to enter into our first deal with SMBC, who have delivered pricing which befits our leading credit ratings, understand our sector, and support our growth aspirations, promoting a better governance agenda.
“We are seeing more interest from overseas funders and investors, and we will continue to work pro-actively to present the many strengths of the social housing sector and Bromford story to new lenders. We hope to see a re-basing of price amongst some of the UK banks who have been pricing wider than expected for our credit profile.”
Bromford secured its first ESG-linked deal tied to improving the energy efficiency of its homes earlier in the year and said at the time it was keen to speak to funders about similar deals. The Housing Association is also developing its ESG framework, which will be the first in the sector to be accredited by S&P, and which it intends to publish by March 2021.
Imran added: “We established our inaugural SLL earlier this year, and we see these deals as the perfect way to create a broad community of interest across Bromford to focus on the things that really matter to us. This deal is about more than just savings; it’s about ensuring that we pro-actively aim to reduce gender pay gap and that we continue to put in place the right reporting and new initiatives to create a workplace in which everyone can thrive, irrespective of their gender. The savings we do generate will be re-invested into projects which support and empower in our communities. If enough organisations do more of this, we can meaningfully contribute to important societal goals which will enrich us all.”
Fiona Regan, Chief People Officer at Bromford, said: “We perform well on our gender pay gap at Bromford but it is important that we continue to strive for improvement. Enabling colleagues to thrive is at the heart of our strategy and this deal will ensure we all know what the gender pay gap is, how well we perform against it and how we can continue to ensure gender mobility right across the organisation. This deal has provided renewed focus to this important agenda, and ongoing reporting will ensure that new initiatives and measures continue to be delivered as we create a workplace which supports all of our colleagues to succeed.”
A spokesman for SMBC said: “SMBC is pleased to have worked on its first governance linked loan with Bromford and shares its aspiration to contribute to the development of the communities in which it operates.“
Legal advice on the deal was provided by Trowers & Hamlins (Bromford) and Addleshaw Goddard (SMBC).
Last month Bromford retained its A2 rating with Moody’s and announced in its half yearly trading update that turnover from social housing letters, which constituted 85% of total turnover, of £110m.
