Marking its eighth ESG-linked deal in the corporate debt space to date, LGIM Real Assets (Legal & General) provides Saxon Weald with sustainability-linked long-term financing to deliver new, energy efficient homes.
2 Nov 2022
LGIM Real Assets (Legal & General), on behalf of its Corporate Debt team, announces today that it has provided Saxon Weald £70m of sustainability-linked financing, to accelerate the UK’s development of new, affordable energy efficient homes. Centrus acted as the sole arranger.
Managing approximately 6,750 homes across Sussex and Hampshire, Saxon Weald is a housing association providing affordable rented and shared ownership homes for individuals and families, as well as properties exclusively for the over 55s. The proceeds of LGIM Real Assets’ investment will be used to finance new homes, designed to be energy efficient – with Saxon Weald targeting EPC A ratings on all new builds.
With rising energy bills, the efficiency of our homes has never been more in focus. The housing sector also remains a major contributor to carbon emissions, with heating and hot water for UK homes accounting for 25% of total energy use and 15% of the UK’s greenhouse gas emissions. If the UK is to meet net zero and be fit for the future, the housing sector requires rapid and radical change. This presents the social housing sub-sector with an immediate challenge – where private sector support will be key.
Tackling this, via a forward-thinking pricing structure with sustainability at its core, Saxon Weald will receive a discount on the coupon provided it meets ambitious energy efficiency targets – better supporting the communities in which Saxon Weald operate, and more widely, playing an important role in the South-East’s energy transition.
Highlighting Legal & General’s longstanding ESG agenda, today’s investment brings LGIM Real Assets’ investments with ESG-linked credentials in the corporate debt space to over £400m, spanning the Social Housing, Higher Education, and Corporate sectors. A significant proportion of this financing has gone towards the social housing sector specifically, supporting some of the UK’s largest social housing providers across major cities and regions* with their decarbonisation and social impact ambitions.
Centrus worked with Saxon Weald to develop strategy and provide transaction advice. Legal counsel was provided by Devonshires and Addleshaw Goddard.
Steve Bolton, Head of Corporate Debt, Europe, LGIM Real Assets: “There’s a stark, deep-rooted supply-demand imbalance when it comes to good quality, affordable housing in the UK. This, with the backdrop of rising energy bills and need to transition to a low carbon economy, demands innovation within the social housing sector.
With an established track record and enduring appetite, we’re pleased to complete another significant investment in this space and further demonstrate our commitment to the future of the UK’s housing provision. This investment marks yet another example of inclusive capitalism at work, delivering a return to our pension holders whilst also benefitting our local communities.”
Michael Chinn, Executive Director, Resources, Saxon Weald: “The new funding forms a core part of delivering our sustainability strategy and in continuing our objective of providing affordable homes. I’m particularly pleased with how well the teams at LGIM Real Assets and Centrus, assisted by Devonshires, structured the new funding to fit our aim to enhance the delivery of sustainable homes for our customers.”
John Tattersall, Senior Director, Centrus: “We are delighted to have worked with the teams at both Saxon Weald and LGIM Real Assets to structure this sustainability linked private placement. The facility will help deliver more energy efficient, affordable homes across the Southeast of England, in addition to facilitating investment in the existing stock to further improve energy efficiency.”
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which a third is international. We also provide powerful asset origination capabilities. Together, these underpin our leading retirement and protection solutions: we are a leading international player in pension risk transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.
*at 31 Dec 2022
LGIMRA is a division of Legal & General Investment Management (LGIM), one of Europe’s largest
institutional asset managers and a major global investor. LGIM manages £1.29 trillion1 ($1.57tn) in
assets, working with a range of global clients, including pension schemes, sovereign wealth funds, fund distributors and retail investors.
LGIM Real Assets has assets under management of £36 billion2 ($43.8bn) and is one of the largest
private markets investment managers in the UK. Investing in both debt and equity and across the
risk/return spectrum, LGIM Real Assets actively invests in and manages assets across commercial,
operational and residential property sectors, as well as infrastructure, real estate, corporate and
Taking a long-term view in order to future proof our investments, LGIM Real Assets continues to lead the industry in ESG performance, considering all environmental, social and governance issues at asset level as well as portfolio level.
1LGIM internal data as at 30 June 2022. These figures include assets managed by LGIMA, an SEC Registered Investment Advisor. Data includes derivative positions.
2Source: LGIM Real Assets. AUM data as at 30 June 2022.
*at 13 Jan 2023
For professional clients only. Past performance is not a guide to the future. The value of an investment and any income taken from it is not guaranteed and can go down as well as up, you may not get back the amount you originally invested. Views expressed are of LGIM as at 12 January 2023. The Information in this document (a) is for information purposes only and we are not soliciting any action based on it, and (b) is not a recommendation to buy or sell securities or pursue a particular investment strategy; and (c) is not investment, legal, regulatory or tax advice. Legal & General Investment Management Limited. Registered in England and Wales No. 02091894. Registered Office: One Coleman Street, London, EC2R 5AA. Authorised and regulated by the Financial Conduct Authority, No. 119272.
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