Housing association L&Q has secured a five-year, £100m credit facility, supplied by BNP Paribas, that provides a margin discount if it gets residents back into work.
The positive incentive loan has an interest rate tied to L&Q meeting certain social impact key performance indicators.
There will be a discount on the margin of the loan if it succeeds in getting at least 600 unemployed residents back into work in the first year and additional 25 residents in each subsequent year.
The loan, which complements L&Q’s existing £5bn funding arrangements, includes an option to extend the term by two additional years and to add an environmental key performance indicator later in the term.
Simon Gates, UK head of corporate coverage and transaction banking at BNP Paribas, said: “It is the result of close collaboration to conceptualise and structure what represents a landmark deal for sustainable finance in the UK.
“To our knowledge, this is the first UK housing association loan that incorporates a concrete, positive-impact metric.”
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