L&G’s investment arm agrees £70m ESG-linked debt facility with housing association

Under the terms of the funding agreement, Saxon Weald will receive a discount on the coupon, provided it meets ambitious energy efficiency targets.

Michael Chinn, executive director of resources at Saxon Weald, said: “The new funding forms a core part of delivering our sustainability strategy and in continuing our objective of providing affordable homes.

“I’m particularly pleased with how well the teams at LGIM Real Assets and Centrus, assisted by Devonshires, structured the new funding to fit our aim to enhance the delivery of sustainable homes for our customers.”

According to LGIM Real Assets, it has so far invested more than £400m in ESG-linked debt, with a “significant” proportion of the finance heading to the social housing sector.

Centrus worked with Saxon Weald to develop a strategy and provide transaction advice. Legal counsel was provided by Devonshires and Addleshaw Goddard.

Steve Bolton, head of corporate debt for Europe at LGIM Real Assets, said: “There’s a stark, deep-rooted supply-demand imbalance when it comes to good-quality, affordable housing in the UK. This, with the backdrop of rising energy bills and need to transition to a low-carbon economy, demands innovation within the social housing sector.”