Legal & General Investment Management Real Assets has loaned €318 mln to Glasgow city council in Scotland, which is struggling to compensate thousands of female employees whom it underpaid for years.
The financing is guaranteed by a portfolio of 473 buildings which the council owns, including ground rents, office assets and industrial estates, as well as strategic assets; the City Halls and the live venue SEC Armadillo.
The loan means the authority does not have to sell off its civic centres to pay up to €558 mln to more than 8,000 women who successfully won a court battle earlier this year against Glasgow City Council. The employees of schools, homecare workers and other services were fighting on the grounds of unequal pay based on gender.
It is thought the property portfolio which is guaranteeing the loan is among the largest ever assembled for this purpose. It also marks the first partnership between L&G and Glasgow city council.
Lorna Brown, head of real estate debt at LGIM real assets, said: ‘Legal & General is pleased to support Glasgow City Council in addressing their historic pay issues through the provision of the majority of the capital required to meet this liability. This is a strong long-term partnership for our real estate debt team, alongside City Properties Glasgow and Glasgow City Council and is an excellent fit for our pension fund capital.’
‘This transaction is testament to our ability to provide significant and complex financing to the public and private sector and our commitment to investments which have a positive social impact. It follows a busy start to 2019, with debt investments across multiple asset classes for a range of property investors.’
Glasgow council leader Susan Aitken said: ‘This deal not only means we can start to put right a historic wrong, but do so while safeguarding the future of the city’s property assets in public use. I’m very pleased to be doing that in partnership with Legal & General, which continues to show great confidence in Glasgow as a place to invest.’
