Bromford secures new £75m sustainability-linked loan with international funder
Leading regional housing association Bromford has today announced a £75m five-year sustainability-linked revolving credit facility with an overseas funder.
In another sector-leading deal, this time with Dutch lender ABM AMRO, we will pay a lower interest rate on the loan if we successfully meet targets to reduce the number of colleague sick days and coach more of our customers into employment or training by 2028.
The new revolving credit facility (RCF) comes with a option to increase the facility by a further £50m, providing additional flexibility for us to support the ambitions of our new strategy which we launched earlier this year, including our goal to build 12,000 new energy efficient homes by 2031. The deal forms part of our strategy to build up an RCF base of over £350m this year as existing facilities expire, which maintains strong levels of liquidity to underpin our development and growth.
Director of treasurey Imran Mubeen said:
We’re delighted to expand our credit lines to a fifth provider, as we continue to drive diversity in our funder base. Our enhanced RCF portfolio will allow us to respond to new market opportunities as they emerge. We are particularly pleased to develop this partnership with ABN AMRO as we disrupt legacy conventions and continue to drive the value our sector deserves. ABN AMRO have already demonstrated a firm commitment to UK social housing and they will be one of our key partners who support us through our funding cycle.
Bromford has pioneered sustainable finance in the sector, issuing the first green and first governance loans over recent years. This deal represents Bromford’s third sustainability-linked loan. The key performance indicators for the deal are driven by Bromford’s corporate strategy and recently published 2023 sustainable finance framework. Bromford aims to reduce the average number of colleague sick days from 9 days to 6.5 days and to coach 1,400 customers into employment or training by 2028. The savings generated on the loan will be reinvested into community projects, a commitment Bromford have already demonstrated on their earlier sustainable loans where savings have already funded community work to support victims of domestic violence.
Imran added:
Like Bromford, ABN AMRO are deeply passionate about driving sustainable outcomes for our people and communities. Our ESG ambitions are Bromford-led, they power our corporate strategy and feed into our business plan as we establish a golden thread across the organisation. We are delighted to connect that golden thread with our new funding; it ensures we have even more visibility, more comparability and more accountability so there is nowhere to hide if we don’t deliver. We believe that every new funding stream should have distinct KPIs for true additionality.
Bromford’s chief customer officer Ashling Fox developed the customer-linked employability and training targets. She said:
Our customers continue to face into the rising cost of living, and the financial pressures they are experiencing are further compounded with rising unemployment. Across our core geographies, the number of people unemployed and seeking employment has increased by 20% since 2022 alone. We want to develop new partnerships with training providers and local employers to help our customers get back into work - it’s a core part of our new Bromford Strategy as we continue to invest in homes and relationships so our people can thrive.
Fiona Regan, Bromford’s chief people officer, developed the colleague-linked targets to reduce collegue sick days. She said:
The wellbeing of our colleagues is a key priority at Bromford, and we are focused on reducing our colleague sick days. As part of our work leading into this loan, we refreshed our wellbeing framework that drives our actions. We have expanded our activity aimed at reducing absence days to include in house physio support, additional mental health awareness training, investment in the Yu Life app to promote healthier lifestyles, and the Employee Assistance Programme to provide a wide range of support services. Our gender pay gap loan has already demonstrated the power of sustainable finance in shining a spotlight on key metrics and broadening our internal discussions to link to sustainability outcomes - and we are confident that this new loan with ABN AMRO will deliver the same benefits for our colleagues.
Richard Smith, director, corporate and investment banking coverage at ABN AMRO UK said:
ABN AMRO are delighted to begin a new lending relationship with a sector-leading housing association like Bromford and to be further extending our support to the sector. Our experience in our home market and unique approach to the sector in the UK means we can provide the flexibility our clients need to grow sustainably. It has been a pleasure to work with the Bromford team in developing a sustainability linked loan that supports staff wellness and transitioning members of their customer base back into employment or career enhancing training; goals which align our own ESG ambitions. We’re excited to begin this journey together and look forward to developing a long term relationship.
