MTVH agrees £100m sustainability-linked loan to fund development ambitions

The landlord said it has forecast the delivery of at least 815 homes in 2023-24 and will report on this target in its full-year results later in the summer.

The loan has three KPIs covering increases in Energy Performance Certificates, to reach Band C or better, reductions in the gender pay gap, and increases in the number of social value points. This is based on the delivery of benefits by the MTVH supply chain.

The interest rate was undisclosed.

Geeta Nanda, chief executive of MTVH, said: “Since 2020 we have committed to aligning our borrowing with our sustainability goals through our sustainable finance framework and working with funding partners that share our commitment to sustainable growth.

“We are delighted to have strengthened our relationship with MUFG EMEA through this transaction and this facility will enable MTVH to continue with its central mission to provide much-needed affordable housing in the UK.

“As reported at our half-year trading update in December 2023, MTVH’s financial position is strong with £765m of available liquidity, and this transaction further supports that position. We will update the market on our full-year housing delivery numbers, and goals for [the] 2024-25 financial year, when we release our full-year results later in the summer.”

MUFG EMEA acted as the sole lender on the financing package.  

The bank is not new to the social housing sector, with deals dating back over the past decade as both a lender and an arranger. As a lender, MUFG made its sector debut as part of a syndicate of banks in a deal with Anchor in 2015 – recently replaced by a new syndicated sustainability-linked loan – before its first bilateral deals followed in 2016, to Family Mosaic (now Peabody) and BPHA.

MUFG participated in another syndicated deal, with Sovereign, in 2019.

Meanwhile, as an arranger, deals have included a £175m private placement arranged with six investors for Network Homes in 2019 and a £150m deal for the same provider in 2020. 

Commenting on its loan to MTVH, Sanjay Narbheram, head of housing finance at MUFG EMEA, said: “The refinancing and increase to the debt facilities will help MTVH in part to continue providing affordable homes for people and communities who need them most whilst meeting the rising demand for housing in the UK.

“MUFG EMEA has built up a great deal of experience in sustainability-linked loans, positioning us well when structuring this facility for MTVH.”

Earlier in May, MTVH named Nottingham City Council chief executive Mel Barrett as the successor to Geeta Nanda when she steps down in September.

According to its results, the housing association delivered a pre-tax surplus of £46.1m in 2022-23, a rise from £12.6m in the previous year.

In a trading update in January, the social landlord warned that its surplus for 2023-24 will be lower than expected because of £105m in one-off provisions and impairments covering fire and general building safety works.