Law firm advises social housing group on first sustainability linked loan

Trowers & Hamlins has advised Bromford Housing Group on the first sustainability linked loan in the social housing sector.

The law firm has assisted Bromford in securing a new revolving credit facility of £50m with NatWest Markets incorporating a margin reduction if the group meets its target strategy for improving the energy efficiency of its homes.

It said the loan is NatWest Markets' first sustainability linked loan, and the first loan in the social housing sector which adopts green principles to track and reward performance, with a margin reduction if the target is met each year.

Bromford, which has 44,000 homes spread across central and south west England, has committed to a target of upgrading existing housing stock with an energy efficiency rating of "C" or below on a year on year basis. This exceeds the minimum energy efficiency standard required for rented residential (currently "E").

The metric will require Bromford to improve the energy efficiency of existing stock through retrofitting, which will compliment their development programme of new homes being built to high energy efficiency standards, Trowers said.

The group’s progress will be monitored and independently confirmed in the annual accounts by its auditors.

Sarah Gooden, Trowers partner who worked on the deal said: "Trowers are delighted to have worked with Bromford on this groundbreaking loan which builds on the team's advice to other RPs on loans with ESG-linked metrics. This includes the first sustainable loan in the sector with a metric linked to childcare provision for Peabody in 2019. We are at the forefront of sustainable financing in the social housing finance sector and this expertise is becoming more important in the current climate."

Imran Mubeen, Head of Treasury at Bromford, said: “Trowers have now advised Bromford on over £1bn of new funding and refinanced debt over the past 24 months. Their expertise and experience on ESG linked lending was particularly powerful on this deal as they laid an early foundation for the negotiations and final documentation to be centred upon in a straight forward way.”

Sarah Gooden, Helen Fysh and Andrew Scopes in Trowers’ banking team worked with Real Estate Finance Security colleagues Melanie Comer and Rachael Mehta.

RBS were advised by Addleshaw Goddard.