Downing LLP has secured a substantial £75 million sustainability-linked facility from HSBC, earmarked by the institution’s property finance division. This move forms part of a broader endeavour to bolster Downing’s sustainability blueprint and extend sustainability-linked facilities to Small and Medium Enterprises (SME) developers.

This sustainability-linked loan (SLL) framework laid down by Downing is crafted to incentivise and acknowledge borrowers’ accomplishments, contingent on predefined sustainability performance targets. The assessment of these targets is executed through an Environmental, Social, and Governance (ESG) scorecard, evaluating a range of criteria including physical risk, embodied carbon, operational carbon, water management, waste management, biodiversity, habitat preservation, and certifications. The framework aims to resonate with Downing’s overarching sustainability strategy, contributing significantly towards achieving its sustainability objectives.

The funding from HSBC is seen as a vital step in diversifying and augmenting Downing’s funding reservoirs. Parik Chandra, partner and head of specialist lending at Downing LLP, expressed satisfaction over the inclusion of sustainability targets in the facility accorded by HSBC, underscoring the growing relevance of sustainability to a broad spectrum of investors.

Downing, known for its lending activities, generally extends loans ranging from £1 million to £30 million to adept developers, with loan to cost (LTC) ratios of up to 90% and loan to gross development value (LTGDV) ratios of up to 70%. In the realm of wholesale finance, Downing zeroes in on lending to bridging lenders, with the latitude to consider loans to other secured lenders as well.

This financing arrangement not only underscores the growing synergy between financial institutions and sustainability goals but also positions Downing LLP in a stronger stance to further its sustainability-linked lending endeavours, reflecting a progressive alignment with the global sustainability agenda.