A portfolio of 15,000 homes will become greener and an additional 2,250 new affordable, sustainable houses will be built in the south east of England after Paradigm Housing Group secured an additional £425m of financing with the support of Lloyds Bank.
The funding comes in the form of a £75m sustainability-linked loan alongside a £350m sustainability bond.
It will help the housing association achieve its corporate strategy over the next five years, which includes the delivery of 2,250 new, affordable and sustainable homes, improvements to the energy efficiency of its existing properties and supporting the group’s tenants and local communities as they recover from the pandemic.
The £75m revolving credit facility provides the High Wycombe-based organisation with the support to hit its ESG targets while expanding its presence across the region. Lloyds Bank will measure Paradigm’s progress against an agreed set of environmental and social KPIs, which align with its new sustainable finance framework.
Sustainability-linked loans (SLLs) offer businesses discounts on their interest rates should they hit sustainability covenants and targets agreed on the terms of their deal.
The new-to-bank deal reflects Lloyds Bank’s Helping Britain Recover strategy and its commitments for both housing and sustainability. The bank is aiming to deliver a minimum of £1.5bn of new financing to the social housing sector with £500m of this will be ESG-linked.
Earlier this month Lloyds Bank Capital Markets also acted as joint bookrunner on Paradigm’s debut capital markets transaction, a £350m, 30-year sustainability bond. The bond, which was three times oversubscribed, aligns with Paradigm’s Sustainability Finance Framework, which embeds ESG factors into the group’s strategy.
Paradigm is one of the South East’s leading housing providers, managing 15,000 homes for more than 37,000 people across 30 local authority areas and employing over 400 staff.
Leke Adebiyi, Assistant Finance Director for Corporate Finance at Paradigm, said: “As the country takes its first steps on the road to recovery from the pandemic, three factors will be at the forefront of housing associations’ minds – sustainability, providing affordable housing and tenant wellbeing.
“We’re committed to delivering on all three fronts. With the backing of Lloyds Bank and this financing package we’re confident of taking meaningful steps on delivering our ESG ambitions.
“We’re grateful for this support to ensure we can achieve our goals and support our tenants across the South East.”
Christopher Yau, origination and sustainability director at Lloyds Bank, said: “Housing associations across the UK are committed to their sustainability responsibilities and this requires strong support from the finance community. This package will ensure Paradigm can hit its ambitious ESG targets and play a role in the South East’s economic recovery.”
Pinsent Masons acted as legal advisors to Lloyds Bank and the joint book runners, JLL conducted the valuations, with Trowers as legal advisors to Paradigm.
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