Stonewater has secured a £75m loan from The Royal Bank of Scotland (RBS), part of NatWest Group, to support its 2030 corporate plan and ongoing development work.
The 10-year variable-rate loan comes with a fixed-rate period for the first six years using a loan-linked International Swaps and Derivatives Association (ISDA) agreement, which is aimed at reducing interest rate risk.
The loan includes sustainability-linked targets.
If Stonewater meets agreed environmental performance indicators, it will get a reduced interest rate.
These targets are based on the number of existing homes rated ‘C’ or above on their energy performance certificate (EPC), the annual increase in its Sustainable Homes Index For Tomorrow (SHIFT) score, and the percentage of new homes with a Standard Assessment Procedure (SAP) score of at least 86.
The £75m will go towards Stonewater’s development pipeline and wider corporate plan over the next five years.
Anne Costain, chief financial officer at Stonewater, said: “This additional funding will be integral to our work delivering our 2030 corporate plan and ensuring our work to build safe and warm homes for customers to enjoy for years to come.
“Continuing our strong and enduring relationships with financial partners like The Royal Bank of Scotland is vital to the continuation of our dedicated work to providing affordable housing across the country.
“We’re grateful for the ongoing support and the guidance and legal expertise of everyone involved.”
John Horton, relationship director at NatWest Real Estate Finance, said: “We are delighted to support Stonewater with funding which will enable the social housing provider to move forward with its exciting growth plans.
“We have recently announced our ambition to provide £7.5 billion lending to the UK’s social housing sector to support the development of new homes and improvements to properties across the UK. This latest deal with Stonewater reaffirms this commitment.”
Dominic Brindley, director, financing & risk solutions at NatWest, said: “In line with a trend we’re continuing to see across the sector, Stonewater elected to put in place a Loan Linked ISDA to hedge the interest rate risk associated with this transaction.
“This provided Stonewater with a high degree of flexibility on how to execute their hedging strategy, something that is critical in the current market backdrop.”
Alice Overton, partner at Devonshires, said: “It was a pleasure to advise Stonewater on this transaction and helping to ensure it is set up to take advantage of hedging opportunities in the current market.
“We are delighted to play a part in the association continuing to deliver affordable, safe and sustainable homes and to make a difference to the communities it serves.”
George Flynn, director at Savills Financial Consultants, said: “We are delighted to have partnered with the Stonewater team on another important financing project.
“This transaction enables Stonewater to access competitively priced bank financing with a simple and effective hedging solution.
“It is great to continue to support Stonewater in another funding project to help deliver the aims in its 2030 corporate plan.”
