This includes what is believed to be the first Green Term loan in the Social Housing Sector. The 10-year £50m Green Term Loan will enable VIVID to specifically fund over 300 new energy efficient homes across Hampshire and Surrey. Alongside this, a £60m unsecured Sustainability Linked Revolving Credit Facility will continue provide working capital funding to VIVID.
The Green Term Loan aligns to the Climate Bonds Initiative Criteria and the Loan Market Association Green Loan Requirements, meaning the homes being financed will be amongst the most energy efficient homes in their locality –these homes will be of EPC B+ or better. They will have emissions intensity in line with the Low Carbon Buildings Criteria, which is aligned with the goals of the Paris Agreement. Using the Green Term Loan will enable VIVID to fund projects and developments that make a strong positive environmental and social contribution to their customers and local area.
Making up the £110m part of the funding package is a £60m, unsecured Sustainability Linked Revolving Credit Facility, which over a 3-year period provides VIVID with continued working capital. With metrics linked to VIVID’s environmental, social and governance (ESG) work, this facility helps incentivise a positive impact for VIVID’s customers and the local areas in which it operates.
David Cassidy, Head of Social Housing at Barclays Corporate Banking, said: “We are proud of our longstanding relationship with VIVID and are pleased to support them with this new package of financing. As well as reaffirming our long-term commitment to VIVID, this work signals our broader desire to fund the creation of new energy-efficient homes that provide a warm, safe, and affordable housing solution for our client’s tenants”.
VIVID were advised by Trowers & Hamlins LLP. Partner, Helen Fysh, commented "We are pleased to have supported VIVID in facilitating this innovative transaction, incorporating both LMA green loan principles and LMA sustainably linked loans principles. This progressive deal highlights VIVID's commitment to minimising its environmental impact while continuing to deliver new homes and support its residents through increased welfare payments."
Barclays worked with Lee Shankland-Gort and Iain Rodley at Addleshaw Goddard on developing the documentation for this new product, with Iain leading the AG team on this transaction. Iain noted:
"It was fantastic to work with Barclays over a period of months to develop this innovative product which provides more flexibility for borrowers than standard green loan facilities in the syndicated markets. We were delighted to work with the teams at VIVID, Barclays, and Trowers & Hamlins on the overall transaction and completing what is believed to be the first green loan facility for the social housing sector for our key client Barclays. We expect to see green loans become a big feature in this sector as Registered Providers seek specific use of proceeds funding as part of their net zero journey."
This funding package underscores VIVID’s ESG credentials coming off the back of the inaugural ESG report, Sustainability Financing Framework and a 1,000 modular home joint venture with Legal & General.
VIVID exists to provide more homes, help customers to thrive, address the cost of living, reduce the carbon footprint of their homes, and maintain the highest standards of transparency and governance. These aren’t extras, it’s what they do. Access to this funding and facility supports this objective and desire.
Duncan Brown, Chief Finance Officer, VIVID said: “We’re extremely proud of our sustainability work – focussing on making our homes more affordable for our customers to live in – and we’re excited about partnering with Barclays to build some of the most energy-efficient homes in the country”.