BNP Paribas and Metropolitan Thames Valley Housing Association sign £50m Sustainability-Linked Loan

Eversheds Sutherland’s Governments and Infrastructure Team has advised BNP Paribas on a £50m sustainability-linked revolving credit facility with Metropolitan Thames Valley Housing Association (MTVH). The three-year facility is believed to be the first Risk Free Rate sustainability-linked loan in the housing association sector.

Under the facility, MTVH will benefit from a reduced interest rate if it achieves pre-agreed environmental targets of reducing greenhouse gas (GHG) emissions linked to energy consumption from its offices, residential portfolio and transport use.  The facility is also particularly notable for its move away from LIBOR and aligns multiple interest rates to SONIA at day one rather than transitioning subsequently with an LMA-style rate switch.

Eversheds Sutherland’s advice on this transaction follows a five-year £50 million revolving credit facility to Optivo Housing Association where the interest rate is tied to Optivo meeting social impact-based key performance indicators.  In that sustainability-linked loan, Optivo benefits from a reduction in the interest rate if they deliver an agreed number of unemployed residents into work or work-based programmes.

Both facilities include options to extend the amount and duration of the finance.

Eversheds Sutherland’s team included Mark Dennison, Partner, Governments & Infrastructure; and Holly Suthren, Principal Associate, Energy and Infrastructure Finance.