10 December 2020
Summary: BNP Paribas has agreed a £50m sustainability-linked revolving credit facility with Metropolitan Thames Valley (MTVH).The three-year facility is believed to be the first Risk Free Rate (RFR) sustainability-linked loan in the sector.
The facility’s interest margin is tied to MTVH achieving environmental targets of reducing greenhouse gas (GHG) emissions linked to energy consumption from both its offices and transport, as well as its residential portfolio. The measured GHG emission reduction values – corresponding to the preceding financial year – are reported.
MTVH has transitioned the facility away from LIBOR (which is due to cease at the end of 2021) with multiple interest periods linked to the Sterling Overnight Index Average (“SONIA”) for GBP.
“We’re committed to supporting the decarbonisation of social housing in the UK, and this innovative loan with BNP Paribas is one of the ways in which we’re playing our part. By meeting sustainability targets to help fund our business we can cut the cost of our debt, further build our financial strength and free up more funds to achieve our ambition of providing more affordable homes and supporting our residents and customers to live well,” says Donald McKenzie, Director of Corporate Finance at MTVH.
MTVH has implemented measures including installing energy efficient technologies, aligning supplier environmental targets to a sustainable procurement policy and operational climate footprint monitoring. MTVH has a progressive carbon emissions reduction strategy and discloses both Scope 1 (direct) and Scope 2 (indirect) carbon emissions.
“MTVH has demonstrated that funding structures, commercial strategy and the demands of the climate crisis need not be at odds. As an active member of the Coalition for the Energy Efficiency of Buildings, BNP Paribas knows that decarbonising the built environment is essential for achieving net zero in the UK. In MTVH we found a partner whose understanding matches our own,” says Anne Marie Verstraeten, BNP Paribas UK Country Head.