National Australia Bank has taken part in the first syndicated Sustainability Linked Loan to a UK-based not-for-profit provider of housing and care for older people.
NAB, along with Barclays, MUFG , and Santander UK, are providing a new £300 million unsecured syndicated Sustainability Linked Revolving Credit Facility (RCF) to Anchor Hanover Group, England's largest not-for-profit provider of housing and care for older people.
Anchor Hanover, which offers retirement properties and specialist care homes to over 65,000 people in later life at almost 1,700 locations across England, is rebalancing its portfolio focused more on financially benefiting from long-term stability from debt capital markets that will underpin its ambitious growth plans.
Barclays acted as global coordinator on the transaction and National Australia Bank acted as sustainability coordinator.
The Anchor Hanover deal marks several firsts for the sustainable finance sector - the first sustainability linked loan in the UK housing association sector under which a borrower has committed to being measured across 5 metrics, and the first sustainability linked loan in the UK housing association sector to include a metric targeting workforce diversity.
Anchor Hanover's performance against the targets will be overseen by its board and performance-related data will be measured, reported and audited annually as part of AH's annual sustainability report.
NAB is an active lender in the UK social housing sector, with combined lending of over £650 million, and is an early adopter of the Sustainability Reporting Standard for Social Housing.
"NAB was thrilled to work with Anchor Hanover on its landmark financing," said David Jenkins, global head of sustainable finance, National Australia Bank. "It was clear to us from the outset that a sustainability linked loan was ideally suited to helping Anchor Hanover demonstrate its ambition and would allow its financiers to support its sustainability initiatives. We were particularly pleased to have the opportunity to work with Anchor Hanover as fellow Early Adopters of the Sustainability Reporting Standard for Social Housing and to benefit from the guidance that commitment offers."
In addition to establishing the first syndicated Sustainability Linked Loan in the sector, Anchor Hanover becomes the first housing association to move its banking facilities to a fully unsecured basis.
"We are delighted to have agreed the first sustainability linked unsecured banking portfolio in the sector, with current and new bank partners," said Sarah Jones, chief financial officer, Anchor Hanover. "This refinancing represents excellent value for Anchor Hanover and will underpin our strategy to provide more and better homes, to offer more opportunities for colleagues, to be more efficient, and to be a more influential voice for people in later life. The ESG component underlines our commitment to sustainability for our current and future residents, colleagues, and the communities in which they live."
As part of its refinancing, Anchor Hanover has secured a long term A+ credit rating from S&P Global Ratings, one of the highest in the housing sector.
Centrus acted as sole financial advisor to Anchor Hanover, supporting the development of the refinancing strategy as well as its structuring and implementation.
"Centrus is committed to finance with purpose," said Phil Jenkins, managing director, Centrus Financial. "Therefore, we are thrilled to have worked with Anchor Hanover on this innovative refinancing which is designed to meet Anchor Hanover's ambitious growth plans in providing housing and care services to older people. In establishing the first fully unsecured banking portfolio in the sector, Anchor Hanover will benefit from strengthened liquidity, improved asset efficiency and reduced operational risk.
"Additionally, we are delighted to have structured the refinancing for Anchor Hanover in ways which reinforces our commitment to sustainability and ESG."
DNV GL, an independent expert in risk management and assurance, has issued a second party opinion confirming the alignment of the facility with the Loan Market Association (LMA) Sustainability Linked Loan Principles.
"Driven by its purpose, to safeguard life, property, and the environment, DNV helps companies in all industries tackle global transformations in a trusted way," said Mark Robinson, sustainability manager, DNV. "We are pleased to have participated in this endeavour with an independent Second Party Opinion to ensure alignment with the LMA Sustainability Linked Loan Principles, contributing to build trust in Anchor Hanover's continued journey."