Large London landlord secures £100m sustainability-linked loan from Japanese bank

News24.05.244.00 PM by James Riding

A large London housing association has secured a £100m sustainability-linked loan to continue its development plans.

Blocks of flats on the Clapham Park regeneration scheme

An MTVH regeneration scheme in Clapham Park (picture: MTVH)

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A large London housing association has secured a £100m sustainability-linked loan to continue its development plans #UKhousing

Metropolitan Thames Valley (MTVH) agreed the deal with the European arm of Mitsubishi UFJ Financial Group (MUFG), the Japanese bank.

MTVH said the transaction strengthened its “robust balance sheet” and will help to achieve its target to deliver 1,000 homes a year across the UK.

In the 2023-24 financial year, MTVH forecast the delivery of “at least 815 homes” and will report on this target at its full-year results later in the summer.

Sustainability-linked loans generally mean the borrower can take advantage of beneficial terms should they hit various green targets. These can be in areas such as carbon reduction, new homes meeting energy-efficiency standards, and delivering specified levels of investment into green improvements across their estate.

Geeta Nanda, chief executive of MTVH, said: “Since 2020, we have committed to aligning our borrowing with our sustainability goals through our sustainable finance framework and working with funding partners that share our commitment to sustainable growth.

“We are delighted to have strengthened our relationship with MUFG EMEA [Europe, the Middle East and Africa] through this transaction, and this facility will enable MTVH to continue with its central mission to provide much-needed affordable housing in the UK.

“As reported at our half-year trading update in December 2023, MTVH’s financial position is strong, with £765m of available liquidity, and this transaction further supports that position.

“We will update the market on our full-year housing delivery numbers and goals for the 2024-25 financial year, when we release our full-year results later in the summer.”

MTVH agreed the loan via its main borrowing entity, Metropolitan Housing Trust Limited. MUFG EMEA was the sole lender on the financing package.

Sanjay Narbheram, head of housing finance at MUFG EMEA, said: “The refinancing and increase to the debt facilities will help MTVH, in part, to continue providing affordable homes for people and communities who need them most, whilst meeting the rising demand for housing in the UK.

“MUFG EMEA has built up a great deal of experience in sustainability-linked loans, positioning us well when structuring this facility for MTVH.”

Earlier this month, MTVH announced it had appointed Mel Barrett as its new chief executive. Mr Barrett, who is currently chief executive of Nottingham City Council, will take over when Ms Nanda steps down in the autumn after 16 years at MTVH.