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Clarion secures £100m loan tied to getting tenants into employment
The UK’s largest housing association has signed a £100m loan deal with a French bank where the margin is linked to how many tenants it can help into jobs.
Clarion Housing Group has become the latest social landlord to agree a five-year revolving credit facility with BNP Paribas tied to social key performance indicators.
The sustainability-linked loan will see Clarion pay a lower interest rate if it supports an agreed number of its residents into employment through the Clarion Futures jobs and training programme.
The interest rate will be set based on its success in the previous financial year, while Clarion will use the loan to help fund its development programme.
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BNP Paribas has previously agreed sustainability-linked loans with three housing associations: L&Q, Optivo and Peabody.
Both the L&Q and Optivo deals are also linked to employment, while Peabody’s facility is based on an agreed number of childcare qualifications through its childcare training programme.
Gareth Francis, director of treasury and corporate finance at Clarion, said: “Our successful jobs and training programme is the largest of its kind and last year helped over 4,000 people into employment.
“It is fantastic that banks, such as BNP Paribas, are recognising the impact of this work and providing funding at a lower interest rate, the savings from which we will reinvest back into providing new affordable homes and improving the lives of our residents.”
Clarion Futures, the 125,000-home landlord’s charitable foundation, has plans to invest £150m over 10 years.
David Reynolds, head of global markets – London legal at BNP Paribas, said: “The sustainability-linked loan mechanism is a powerful tool to support companies, communities and banks in applying innovation to tackle social and economic challenges, such as unemployment.”
