Lloyds Bank has chosen the UK pub industry for the latest loan to be issued through its Green Lending Initiative, which grants reduced pricing for loans to assets that hit agreed sustainability criteria.
In a syndication with BNP Paribas, the bank has provided £50 million (€56 million) of finance to Ei Group, which was formerly known as Enterprise Inns and is the UK’s largest leased and tenanted pub company.
In a first for the sustainable lending drive, the loan was not provided by Lloyds’ commercial real estate unit, although the debt package is tied to the property portfolio of the sponsor.
The Lloyds Bank Green lending initiative is a £1 billion commitment, launched in 2016, to incentivise corporate clients’ efforts to reduce CO2 emissions from their real estate assets. The initiative forms part of the bank’s Responsible Business agenda.
Ei Group is working with specialist energy consultants to identify energy saving upgrades in its managed as well as leased and tenanted estate to reduce consumption and monitor and identify savings.
“The pub industry is of huge importance to local communities across the UK and this deal, supporting Ei Group’s energy-saving initiatives, is another clear example of how Lloyds Bank is helping Britain prosper,” said John Feeney, managing director and head of global corporates at Lloyds Bank.
Lloyds has written loans to nine borrowers through the initiative, arranging a total of £867 million of debt. The initiative provides margin reductions of up to 20 basis points on loans that finance energy-efficient schemes.
In September, the bank provided a £61 million green loan to Nurton Developments, to finance 2 Colmore Square in Birmingham. The office building is now intended to switch to 100 percent renewable energy sources.
In April, Lloyds arranged a €600 million syndicated financing for French REIT Unibail-Rodamco, priced against sustainable performance criteria. The five-year revolving credit facility would enable Unibail to refinance a 2011 debt facility, providing the Paris-based company with liquidity for general corporate purposes.
The Unibail-Rodamco loan was the first time a loan arranged through the scheme was syndicated, meaning that Lloyds used the green initiative on its portion of the financing and its syndication partners followed the principle.