THFC secures £345m European loan deal

The facility is more than three times greater than the largest loan THFC has previously secured from the bank, of £100 million in November last year.

A statement released by the corporation today said the money would be on-lent to affordable housing projects across the UK, with a ‘significant portion’ going directly to associations in Scotland, Wales, and Northern Ireland.

THFC chief executive Piers Williamson said: ‘We are excited to be working with EIB in placing this facility in the UK regions. We have already had a really enthusiastic response. 

‘In Wales we have also been able to work in partnership with the significant regional funder, Principality Building Society, to bring up to an extra £30 million of investment alongside EIB. This whole project is a first rate example of Europe being able to facilitate positive outcomes in the UK.’

This will be the sixth tranche of EIB funding secured by THFC over the past 11 years.

The £100 million facility agreed by the two lenders last November was on-lent to eight associations at a margin of less than 0.1 per cent over Libor. At that time, the commercial banks willing to lend long-term to housing associations were closer to 2 per cent. 

The EIB is the long-term lending bank of the European Union. It uses its triple-A credit rating to borrow large sums in the capital markets, which it on-lends on favourable terms to projects which ‘further EU objectives’. Last year it raised around 60 billion euros.

It has lent directly to large-scale social housing regeneration projects run by landlords such as Gentoo and Wakefield District Housing.

But it uses THFC as an intermediary to fund smaller-scale developments.

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