UK Housing Association L&Q and BNP Paribas Close Landmark Positive Incentive Loan

June 26, 2018

26 June 2018 – London, UK – L&Q, a UK regulated charitable housing association which provides accommodation for more than 250,000 people primarily across London and the South East, today announced that it has secured a new five year, GBP100m credit facility from BNP Paribas. The loan complements L&Q’s existing £5bn funding arrangements and will enable it to continue building quality, affordable homes for the most vulnerable in society.

Uniquely, the facility is structured as a positive incentive loan whose interest rate is tied to L&Q meeting certain social impact key performance indicators. Through its Independent Lives programme, L&Q undertakes capacity building by working directly with its residents and others in the wider community to develop their employability skills and find appropriate and sustainable jobs. Under the terms of the agreement, L&Q will benefit from an undisclosed discount on the margin of the loan if it succeeds in getting at least 600 unemployed residents back into work in the first year, rising by an additional 25 residents in each subsequent year.

The loan also includes an option to extend the term by two additional years, as well as the possibility of adding an environmental key performance indicator later in the life of the facility. This will supplement the existing discount available to L&Q if it meets the social impact target.

Waqar Ahmed, Group Finance Director at L&Q, said: “Everything that L&Q does begins with social purpose, and we believe that no one should be denied the opportunity to achieve their potential because of where they live.

“Through the L&Q Foundation we are investing £250 million to transform communities and help people lead independent lives. By forging strong relationships with partners, we are able to deliver even greater charitable outcomes.

“BNP Paribas is exactly the sort of partner we are looking for, and we are delighted to have completed this ground-breaking deal with them. The team at BNP Paribas share our sense of social purpose, and our combined vision is going to help hundreds more people into employment every year.”

In February 2017, BNP Paribas announced a new corporate social responsibility policy, designed to create a positive impact in society. By extending loans to corporates and developing sustainable investment products, the bank aims to contribute to the United Nations’ Sustainable Development Goals.

Simon Gates, UK Head of Corporate Coverage and Transaction Banking at BNP Paribas, said: “We are pleased to have closed this transaction with L&Q. It is the result of close collaboration to conceptualise and structure what represents a landmark deal for sustainable finance in the UK: to our knowledge, this is the first ever UK housing association loan that incorporates a concrete, positive impact metric.

“L&Q will be assessed on the actual impact realised in the community in terms of helping residents back to work. We think this is a watershed moment and we are honoured to support L&Q as it continues its essential work of building affordable, high-quality homes.”


Notes to editors

About L&Q

L&Q is a regulated charitable housing association and one of the UK’s most successful independent social businesses. The L&Q Group houses around 250,000 people in more than 95,000 homes, primarily across London and the South East. ​L&Q’s vision is that everyone has a quality home they can afford, and we combine our social purpose with commercial drive to create homes and neighbourhoods everyone can be proud of. Our core tenure is social rented housing. On average, our residents living in these homes pay less than 50% of market rents, making them genuinely affordable for people on lower incomes.

We focus on the needs of our existing social housing residents by investing in their homes, local communities and services. We also create high quality homes for private rent, shared ownership and outright sale. In response to the housing and affordability crisis, we will build 100,000 new homes over ten years. Of these, 60,000 homes will be built or funded by L&Q, whilst a further 40,000 will come through partnerships. Crucially, at least 50% of these new homes will be genuinely affordable, with a target of 60% in London.

As a charitable organisation, our role goes beyond providing homes and housing services. We are a long-term partner in the neighbourhoods where we work. We hope to build aspiration, opportunity and confidence in our communities through our £250 million L&Q Foundation and our skills academy.  Our care and support subsidiary, L&Q Living, also offers housing and other assistance to meet the evolving needs of older and vulnerable people in our society.

About BNP Paribas

BNP Paribas is a leading bank in Europe with an international reach. It has a presence in 73 countries, with more than 196,000 employees, including around 149,000 in Europe. The Group has key positions in its three main activities: Domestic Markets, International Financial Services (whose retail-banking networks and financial services are covered by Retail Banking & Services) and Corporate & Institutional Banking, which serves two client franchises: corporate clients and institutional investors.

BNP Paribas employs more than 9,000 people across 10 business lines in the UK. These include Corporate & Institutional Banking, Exane BNP Paribas, Leasing Solutions, Arval, Real Estate (including Strutt & Parker acquired in September 2017), Asset Management, Cardif Pinnacle, Commercial Finance, Personal Finance and Vauxhall Finance. Around half of its employees are in Corporate & Institutional Banking, based in London, while the others are based in various offices across the country, including Belfast, Birmingham, Cardiff, Glasgow, Manchester.

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