Paragon Asra (PA) Housing has become one of the first housing associations to use a sustainable finance approach to secure new investment.
PA Housing launched its ‘Sustainable Finance Framework’ (SFF) with potential investors in May, then used this to issue a £400 million bond. The bond was very popular with investors, meaning the interest costs are slightly more than two per cent.
According to Social Housing magazine PA Housing is just the third housing association in the country to issue a sustainability bond.
It means the association has promised investors it will use their money to fund certain projects that will deliver sustainable benefits.
The SFF approach aligns with the United Nations’ sustainable development goals and allows investors to demonstrate their funds are being used to deliver key aims such as more energy-efficient social homes
Simon Hatchman, executive director, resources, at PA Housing, said: “This is a really important moment for PA Housing.
“As a not-for-profit social housing provider, we have the potential to make a profoundly positive impact on people’s lives and we intend to do all we can to make this a reality.
“By raising funds through our new Sustainable Finance Framework, we are ensuring we use our strong balance sheet to secure competitive funding from a range of investors. This allows us to invest more in improving our existing homes to make them cheaper to live in and build 6,000 more social homes to high energy-efficiency standards by 2030.
The funding will also enable us to invest in wider estates infrastructure, including electric vehicle charging points, recycling facilities and improvements to public space.”
He added: “We are very pleased with the outcome of this transaction. As a proud BAME housing association, it has been encouraging to see the extent to which our BAME background resonated with investors, keen to see broader representation in leadership and board membership. This influenced our decisions on the allocation process.”
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