Silbury Finance (“Silbury”) offers bespoke senior development finance solutions for property professionals active in the residential, retirement and student accommodation sectors. Backed by global alternative investment management firm, Oaktree Capital, Silbury-funded projects vary in size, with typical loan sizes ranging from £20 million to £150 million.
To support its loan origination, Silbury turned to AIB Trust for a financing solution. Discussing the lender’s specific financing needs in detail, the AIB Trust team agreed to a facility that converts Silbury’s real estate development loans into transferable notes which are financed by AIB Trust under a repo transaction with daily cash margining. The current loan portfolio consists of development loans across the residential and senior living sectors in London and the South East, with the ambition to significantly grow and further diversify the book over the coming years.
Going one step further, Silbury and the AIB Trust team sought to find an incentive for Silbury’s borrowers to develop their schemes in an energy efficient manner. To achieve this ambition, both parties signed an “ESG-repo” for the most recent loan added to the portfolio, a £40 million facility supporting the development of a new retirement village in Royal Tunbridge Wells, Kent - further information on the underlying development can be found here.
If the development scheme achieves a “Very Good” BREEAM rating, AIB Trust will offer a discount on the repo exit fee to Silbury, which will be passed on in full to the underlying borrower in addition to the discount on the loan exit fee already provided by Silbury, marking AIB Trust’s first repo with green and sustainable proceeds.
George Carter, Repo & Risk Transformation, Private Financing, AIB Trust, commented: “We are absolutely delighted to have been able to support Silbury with a new repo financing facility and very proud to have now incorporated an ESG component into the package. By implementing this innovative ESG component on the financing of future assets in our commercial real estate (“CRE”) repo portfolio, we can make a positive environmental impact on the development of new CRE assets in the UK. Climate is of paramount importance to our business and our customers, and we continue to support companies such as Silbury whilst also constantly striving to advance the broader sustainable finance market with AIB Trust’s first ESG-repo.”
Matthew Pritchard, Co-Founding Partner of Silbury Finance, said: “We are very pleased to have agreed a comprehensive repo financing package with AIB Trust, which supports our ambitious origination plans. We are particularly excited to now introduce an ESG component to our loans and also our facility with AIB Trust, which underlines our commitment to play our part in the transition to a green economy by incentivising the green development of residential and other living real estate assets in the UK.”
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