Legal & General signs £150m loan to provide 5,500…

Leading UK financial services provider Legal & General has announced the signing of a £150m social loan. The funds will be used to finance 5,500 affordable homes and the loan was arranged by BNP Paribas, HSBC UK and SMBC Group, as part of a transaction with Legal & General Affordable Homes (LGAH).

Since its launch in 2018, more than 2,500 homes have been supplied and another 6,500 are on the way. As one of the government’s strategic partners in providing affordable housing, the houses will help meet the significant demand for housing across England.

By contributing to the affordable housing market, LGAH aims to improve the health and well-being of individuals and to make a positive contribution to the community.

The social loan will help accelerate the delivery of social and affordable rental housing in addition to shared ownership across the country.

Chris Hewitt, CFO of Legal & General Affordable Homes, comments, “Since its launch four years ago, Legal & General Affordable Homes has deployed institutional capital at a rapid pace to accelerate the delivery of affordable housing across the country. Over the past few years, Legal & General has committed over £1 billion of its own pension funds to these efforts, and they will be used alongside this innovative social lending structure. This product reinforces our commitment to the sector and our work to help reduce inequalities in communities across the country. Although we are pleased with our progress, 1.4 million households remain on waiting lists for social housing across the UK and there are still major challenges to close this gap. With the formation of a new government, we hope the Affordable Housing Program will be at the heart of any new policy and look forward to continuing to work in partnership with the sector to provide the homes the country desperately needs.

This is the first social lending to use the syndicated product in the UK, and it follows the Loan Market Association (LMA) social lending principles, with all schemes reviewed by the LGAH Review Board , which oversees the selection, evaluation and monitoring of investments.

BNP Paribas acted as coordinator of the social loan, co-lead manager and lender. Laetitia Girolami-Boyer, Director of Sustainable Finance Markets, BNP Paribas, explains: “BNP Paribas is delighted to have partnered with L&G Affordable Homes on this social loan. This collaboration demonstrates the power of sustainable finance to support affordable housing, well-being and community engagement. Alignment with LMA social lending principles catalyzes best practice in the sector, and the transparency built into the lending is an added feature to ensure tangible social impact.

HSBC UK was the facilities and security agent, joint lead arranger and lender. SMBC was Joint Lead Arranger and Lender, with each bank committing £50m.

Robert King, Head of Sustainable Finance at HSBC UK, concludes: “As a bank, HSBC UK is committed to the principle of ‘achievable change’ and to helping its clients achieve their business objectives through tailored solutions. and innovative. We want to show our customers how their sustainability and social responsibility ambitions will not only make a big impact on the world around us, but also make good business sense. We are committed to supporting our clients’ sustainability ambitions through tailored and innovative solutions like this social loan for statutory and general affordable housing.

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