Goldman and BNP Paribas sign deals with housing associations
Goldman Sachs, the global investment bank, has entered the UK social housing sector’s lending landscape with a £50m loan to Places for People (PfP).
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Goldman Sachs, the global investment bank, has entered the UK social housing sector’s lending landscape with a £50m loan to Places for People (PfP).
The loan is fully unsecured, and comes after the New York-headquartered investor acted as sole arranger for the housing provider on €150m of senior unsecured notes, issued to European investors.
Funding vehicle Places for People Treasury issued the 15 and 20-year notes on 3 May as part of PfP’s now-£2bn Euro Medium-Term Note programme.
A €100m tranche, maturing in May 2039, was issued at a fixed coupon of 2.5 per cent, while the remaining €50m, which matures in May 2034, was issued at 2.32 per cent.
According to Goldman Sachs, the notes issuance brought “new investors to the sector”.
Funds will be swapped back to sterling via a cross-currency interest rate swap, it said.
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Jeroen Rombouts, partner at Goldman Sachs, said: “We are pleased to have worked with the team at Places for People on this very important transaction, for the sector as a whole and for Goldman Sachs.
“I am pleased our team were able to bring solutions to the table which helped deliver financing at highly attractive rates, allowing Places for People to continue the important work of developing social housing in the UK.”
PfP will use the funds for general corporate purposes.
The loan follows an announcement by Goldman Sachs in April that it was making a £75m capital investment into South Derbyshire-based modular housing manufacturer TopHat.
Meanwhile, London G15 housing association Optivo has become the latest to sign a sustainability-linked loan (SLL) with BNP Paribas, following in the steps of A2Dominion and L&Q.
The bank – which lent to the sector before the financial crisis – has returned with a structure that “incentivises employment support and work-ready training for Optivo residents”.
Under the five-year, £50m revolving credit facility, the interest rate is tied to Optivo meeting social impact-based key performance indicators. There is an option to increase the size of the facility to £75m, as well as extend the tenor.
The pair said Optivo will draw on the loan for general corporate purposes and will reinvest interest rate savings to help deliver employment support and work-ready training programmes to residents in Optivo households and communities.
Under the terms of the agreement, Optivo will benefit from a lower interest rate margin on the loan if it delivers an agreed number of unemployed residents into work or supports them with work-ready training. This target rises incrementally over the five-year life of the loan.
Optivo will publish the outcome in its annual report.
Sarah Smith, chief financial officer at Optivo, said: “Our full commitment is to building homes, making places and enhancing lives. We’re delighted BNP Paribas are joining forces with us to maximise our positive social impact.”
Simon Gates, UK head of corporate coverage and transaction banking at BNP Paribas, said: “Ultimately, thanks to Optivo’s focus on employment, this sustainable linked loan is about getting people back into work, which is good for individuals, families, the economy and society.
“It’s a business model that BNP Paribas supports, with this deal being the second SLL we’ve structured in the UK housing association sector in the past 12 months.”
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