Notting Hill Genesis will this week receive the proceeds of our first sustainability bond, issued under a Euro medium-term note (EMTN) programme and in line with our new sustainable finance framework, published earlier in May.
The £250 million green bond will be repaid over 15 years at a fixed interest rate of 2.08%, with the proceeds used mainly to fund two kinds of new home – those built for social housing, including general needs and shared ownership properties, or those built to a good standard of sustainability. Homes in the second category would need to achieve an energy performance certificate (EPC) of at least B, where A is the most efficient and G the least. "Issuing a green bond is an important step for Notting Hill Genesis," says chief financial officer Paul Phillips.
It’s not only a key part of our drive to become a more sustainable organisation, but also puts us in a good position financially. Issuing this bond improves our liquidity and establishes us further in the capital markets – a vital source of additional income which enables us to fulfil our core social purpose to build and maintain quality affordable homes, creating diverse and thriving communities.
The bond is part of our work to develop a robust environmental, social and governance (ESG) framework within our organisation, which also includes reporting against the newly created sustainability reporting standard for social housing. Making our ESG performance information more accessible will demonstrate to our residents and other stakeholders the positive impact we are making against these goals. In particular, it will demonstrate that by investing in our organisation, stakeholders are contributing to positive social and environmental impacts.
We were advised by Devonshires solicitors, led by partners Julian Barker, Alice Overton (banking and capital markets) and Sharon Kirkham (property charging) on the establishment of the EMTN programme and the subsequent bond issue. Julian Barker said:
We are delighted to have supported Notting Hill Genesis on the programme set-up and first issue of sustainable bonds. The programme provides a flexible basis for future funding opportunities while also showcasing NHG’s commitment to ESG objectives.
The new bond follows a trading update for the year ending 31 March 2021, which forecasts a surplus for the year well above budget.