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Biggest lender from UAE enters UK social housing sector
The biggest lender in the United Arab Emirates, First Abu Dhabi Bank (FAB), has entered the UK social housing sector.
FAB has lent London housing association Optivo £50m in a three-year revolving credit facility with the option of increasing it to £75m.
Tim Luckhurst, executive director at FAB UK, said: “FAB UK is delighted to partner with Optivo to support their efforts to deliver new homes over the next three years, as well as assisting their residents into work and training.
“We are committed to being a responsible company by conducting our business in the way that balances people, profit and social conscience.”
Optivo borrowed the money as part of a £200m package from a small number of lenders. This also included a five-year revolving credit facility worth £50m with BNP Paribas, which has not done business with the association before.
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The remaining £100m was also a revolving credit facility and secured from Barclays, a previous funder of Optivo.
Sarah Smith, chief financial officer at Optivo, said: “This funding ensures financial stability during a crucial time for us. Demand for affordable homes is extremely high and, as a housing association, we have responded by planning to start 4,850 homes over the next three years.
“We are delighted to have significant financial support from Barclays, BNP Paribas and First Abu Dhabi Bank UK. It not only shows confidence in Optivo but the UK social housing sector as a whole.”
According to Optivo, it will get a lower rate on the loans from BNP Paribas and FAB if it manages to get over 1,000 of its residents into work and training this year.
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 sustainable linked loan we’ve structured in the UK housing association sector in the past 12 months.”
Andy Taylor, relationship director at Barclays Corporate Banking, added: “By providing this new £100m revolving credit facility, we’re helping Optivo deliver on their planned development programme of 4,850 new homes over the next three years.
“Building more quality affordable housing is one of the most significant challenges facing the UK, and at Barclays social housing team we’re committed to doing all we can to support organisations like Optivo and allow more families to get the homes they deserve.”
