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L&Q agrees £100m ‘positive incentive’ loan with French lender
L&Q has agreed a £100m credit facility with French bank BNP Paribas, which includes a provision for a discounted interest rate if the borrower meets “certain social impact key performance indicators”.
Under the terms of the loan, the margin will be reduced if L&Q gets at least 600 unemployed residents back into work in the first year. That target will rise by 25 residents in each year of the five-year loan.
L&Q already works directly with residents to develop employability skills through its Independent Lives programme.
The loan could be extended by two years, with the possibility of adding key performance indicators connected to the environment.
The loan is the second BNP Paribas has made to a UK housing provider in as many months, having re-entered the sector with a £50m revolving credit facility for A2 Dominion.
Waqar Ahmed, finance director at L&Q, said: “Everything that L&Q does begins with social purpose, and we believe that no one should be denied the opportunity to achieve their potential because of where they live.
“Through the L&Q Foundation we are investing £250m to transform communities and help people lead independent lives. By forging strong relationships with partners, we are able to deliver even greater charitable outcomes.
“BNP Paribas is exactly the sort of partner we are looking for, and we are delighted to have completed this ground-breaking deal with them. The team at BNP Paribas share our sense of social purpose, and our combined vision is going to help hundreds more people into employment every year.”
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The bank has been offering ‘positive incentive’ loans to customers under a new corporate social responsibility policy, which came into force in February 2017.
“To our knowledge, this is the first ever UK housing association loan that incorporates a concrete, positive impact metric,” said Simon Gates, UK head of corporate coverage and transaction banking at BNP Paribas.
“L&Q will be assessed on the actual impact realised in the community in terms of helping residents back to work. We think this is a watershed moment and we are honoured to support L&Q as it continues its essential work of building affordable, high-quality homes.”
