PITCH completes new sustainability-linked loan with Aviva Investors

The Property Income Trust for Charities (PITCH), managed by Advent Capital Investments Ltd, has signed a new GBP42 million sustainability-linked loan facility with Aviva Investors to take advantage of low interest rates and enhance returns.

The new facility is fixed for seven years at an attractive rate of 2.65 per cent reducing the Fund’s weighted cost of debt to 2.6 per cent from its previous level of 3.1 per cent, while extending the average loan term to 4.9 years. The LTV on the portfolio increases marginally to 13 per cent but remains well below its maximum parameter of 20 per cent.

The loan is secured against seven properties in the Fund and falls within Aviva’s Sustainable Transition Loan Framework. This provides margin incentives to PITCH in return for implementing various environmental improvements to the properties including EPC enhancements, solar PV panel installations and the provision of electric vehicle car charging points. This ensures continued alignment with PITCH’s own ESG strategy, taking a proactive approach on key ESG topics, improving baseline, and setting clear and measurable targets.

The KPIs associated with the sustainability-linked aspects of the loan have been subject to a rigorous second party opinion report by ISS, an independent third-party rating agency, to verify the integrity and ambition of the proposed improvements and to demonstrate alignment with Aviva’s framework.

Simon Martindale, fund director of PITCH, says: “With economic prospects improving, we believe it is an opportune time to take advantage of historic low borrowing rates and secure a long-term facility that will contribute positively to enhancing distributions to investors.

“Entering a partnership with Aviva for a Sustainable Transition Loan provides an economic benefit as well as continued alignment with PITCH’s own decarbonisation strategy as we transition the portfolio towards net zero. The proposed loan will not only have positive externalities for the environment but will also allow us to enhance the quality of our assets through partnership with our tenants with an associated margin improvement.”

Gregor Bamert, head of Real Estate Debt at Aviva Investors, adds: “We are delighted to build on our existing lending relationship with PITCH by supporting their decarbonisation strategy through the issuance of a Sustainable Transition Loan. There is strong alignment in linking the commercial terms of the loan to the achievement of specific meaningful and ambitious KPIs which ensure an appropriate risk adjusted return for our investors.”