Scottish Widows £61m loan to property investor CLS

Real estate investor CLS announced it completed a £61.7 million loan from Scottish Widows secured on a portfolio of five UK office properties.

“This loan replaces two existing loans of £27.4 million, which were due to expire before the end of 2021, as well as financing three recent unencumbered acquisitions,” said CLS.

“Overall, the transaction will result in net additional cash to CLS of £33.7 million, after costs.

“The twelve-year loan has a loan-to-value ratio of 55% and a fixed interest rate of 2.65%.

“Subject to certain conditions, CLS will be able to remove or substitute properties as security for the loan.

“The loan, which is in line with the LMA sustainability-linked loan principles, incorporates a 10-basis point margin reduction dependent on the delivery of specific sustainability targets.

“The loan will increase the proportion of CLS’ total loans which are green/sustainability-linked to around 20%.”

CLS Chief Financial Officer Andrew Kirkman said: “We have had a strong relationship with Lloyds Banking Group, of which Scottish Widows is a part, for many years.

“This long-term financing recognises and incentivises our sustainability commitments while aligning them to those of Scottish Widows.

“Furthermore, this loan diversifies our debt profile and the amount meeting green financing principles.”

Duncan Smith, Director of Loan Investments at Scottish Widows, said: “We have worked closely with CLS to put in place this long-term funding package to support its continued growth strategy.

“This marks the first sustainability-linked Scottish Widows loan and follows our recent announcement to halve our carbon footprint of investments by 2030 and target net zero emissions by 2050.”