UK Housing Association Optivo and BNP Paribas Announce Sustainability-Linked Loan - BNP Paribas United Kingdom
BNP Paribas UK News
July 24, 2019 - , , ,

UK Housing Association Optivo and BNP Paribas Announce Sustainability-Linked Loan

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Loan structure incentivises employment support and work-ready training for Optivo residents

UK Housing Association Optivo today announced it has secured a new five-year £50 million revolving credit facility provided by BNP Paribas. The facility is structured as a sustainability-linked loan (SLL) where 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 £75 million, as well as extend the tenor.

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.

Participants will benefit from a three-stage development approach based on an ‘end to end’ employment support pathway:

  1. Engagement, confidence building, information advice and guidance
  2. Pre-employment ‘work ready’ training
  3. ‘In work’ support training.

Employment opportunities include security, construction, beauty and hospitality sector jobs.

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 the Group’s 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 last 12 months.”