Large Manchester landlord secures £100m credit deal with ESG-linked option
A large Manchester-based housing association has secured £100m in credit through a new deal, with the option to introduce sustainability-linked key performance indicators (KPIs) in the future.
Great Places, which operates around 24,000 homes across the North West of England and Yorkshire, has agreed a five-year revolving credit facility (RCF) with NatWest consisting of £85m of refinanced debt and £15m of new debt.
The interest rate on the RCF is variable and linked to SONIA (the sterling overnight index average).
However, a Great Places spokesperson told Inside Housing the facility has been designed to allow for the introduction of sustainability-linked KPIs “in the near future”.
The group is aiming to deliver 11,000 new homes by the end of the decade and wants all its homes to have an energy performance certificate (EPC) rating of at least C by 2028.
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Some housing associations have been taking advantage of investors’ appetite for deals linked to environmental, social and governance (ESG) considerations by securing lower interest rates if they meet targets in areas such as energy efficiency.
Great Places took on Equity Housing Association a year ago. The new finance deal consolidates existing loans both groups had before the merger.
Phil Elvy, executive director of finance at Great Places, said the refinancing involved a “longer-term” facility with “more competitive margins and improved covenants”.
“This forms an important piece of our funding jigsaw as we continue to invest in the safety and energy efficiency of our existing homes, as well as deliver a very significant number of much-needed new affordable homes across the North West and south Yorkshire,” he added.
In February, Great Places said its target for delivering new homes had been missed due to “continued delivery challenges around labour, materials, approvals and land registration”. In a market update, it revealed it had completed 388 new development properties in the nine months to the end of December 2021.
In its last reported full year to March 2021, the landlord’s surplus more than tripled, to £54.3m, as turnover rose to £144m.
Savills Financial Consultants advised on the new funding deal.
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