14 September 2020
Barclays picked up the awards for impact investment of the year for both health and energy through the UK-listed bank's involvement in an innovative bond deal with healthcare charity HealthRight 360 and an equity investment in sustainability platform SaveMoneyCutCarbon (SMCC).
In December, Barclays led a $58.8 million bond issue – $48.5 million of which was designated as a social bond – to San Francisco-based HealthRight 360, which provides healthcare to vulnerable and underserved communities in California.
Established more than 50 years ago, HealthRight serves about 32,000 people every year – providing care including primary medical, mental health and substance use disorder treatment.
The bond was structured with a maturity of 30 years, but HealthRight primarily secures its revenues from short-term government contracts. Consequently, Barclays said it had to engage extensively with over 50 target investors in order to educate prospective backers on the work of charity in order to make them comfortable with such a long-term investment.
Barclays assistant vice president for public finance, Kristina Huhn, says this was the "shining achievement" for Barclays: getting the investors to understand what the investment was. "Once they understood, they committed," she adds. Ultimately, the bond was nine times oversubscribed.
Barclays said the bond was a "game-changer" for HealthRight. The funds allowed the charity to refinance existing loans which carried higher interest payments and to acquire equipment for its treatment facilities in San Francisco and Los Angeles.
"The deal represents a milestone for the non-profit sector: securing long-term financing in the capital markets with social bonds sends a powerful signal that social and financial returns truly can go hand-in-hand," says Huhn.
The energy impact investment of the year award was also scooped by Barclays for its equity investment in SMCC. Founded in 2012, the UK-based consultancy provides a marketplace for "cost-effective" products and services for businesses and consumers looking to reduce their carbon footprint.
The equity deal for an unspecified amount was the inaugural investment under the Barclays Sustainable Impact Capital initiative, which aims to invest £175 million ($230 million) over the next five years.
"Barclays' investment will be a key enabler allowing us to accelerate plans to grow nationally and beyond," says SMCC chief executive officer Mark Sait.
"We are uniquely positioned to help facilitate the retrofit challenge faced by the UK's domestic and commercial building stock and turbocharging companies' adoption of energy and water efficiency to achieve the UK's net zero carbon target."
Selling products from water-saving taps and showers, to low-energy light bulbs and electric vehicle charging points, SMCC also provides personalised carbon statements and other tools to customers to help them make better decisions regarding sustainability solutions for their homes and businesses. SMCC says it has already served hundreds of thousands of customers, including schools, hospitals, hotels and residential homes throughout the UK.