Aviva Investors provides CLS with £154m senior debt facility

Written by Michael Griffiths

30/09/2020

Aviva Investors, the global asset management business of Aviva, has provided CLS Holdings with a £154m senior debt facility towards the refinancing of 12 UK assets.

The financing will be provided over 10 and 12-year fixed-rate tranches and is being made on behalf of a combination of the Aviva UK Life Annuity business as well as third-party client mandates.

The facility has also been structured to include KPIs that are linked to sustainability targets, which have been independently reviewed to provide assurance that they are aligned with LMA sustainability-linked loan principles.

A margin reduction of up to 10 basis points is available, which Aviva Investors suggested will be dependent on CLS delivering specific targets throughout the life of the facility.

“We are delighted to support CLS and the strong emphasis it places on the provision of a sustainable portfolio,” said Aviva Investors head of real estate debt, Gregor Bamert.

“This transaction builds on our experience of incentivising borrowers to bring the green credentials of their portfolios into sharper focus, and we are pleased to have received independent assurance that the facility is aligned with LMA sustainability linked loan principles. The wide range of investment capital used within the facility further underlines our ability to tailor debt solutions for borrowers whilst delivering strong opportunities for our investor clients.”

Located across London and the South East of England, the portfolio consists of 11 office assets alongside a mixed-use scheme in Vauxhall, which includes hotel and student accommodation assets. Aviva Investors also indicated that the assets are being let to a broad mix of tenants with income “well diversified” across the portfolio, and carry a weighted average unexpired lease term of 5.2 years.

Aviva UK Life chief investment officer, Ashish Dafria, commented: “We are very pleased to be working alongside Aviva Investors and their external clients on this new financing. The sustainability elements of the facility are particularly attractive, allowing us to work towards reducing the environmental impact of our annuity investment portfolio.”

CLS chief financial officer, Andrew Kirkman, added: “This loan increases our weighted average loan maturity by nearly 50% to 4.5 years. Moreover, we are delighted that the loan recognises our sustainability progress and incentivises our future target delivery as well as aligning our sustainability commitment to that of Aviva Investors.”

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