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Aggregator raises £13.2m for association at low rate in ‘positive’ post-election market
Social housing aggregator The Housing Finance Corporation (THFC) has raised £13.2m for Greater Manchester-based housing association Irwell Valley Homes through a sale of retained bonds.
The bonds, which were sold by THFC (Funding No. 3) to the investor markets, were priced at an all-in rate of 2.286%, making it 1.2 percentage points more expensive than the cost of equivalent government borrowing.
In a statement announcing the deal, THFC said the price reflected a “positive post-election market”.
Irwell Valley Homes, which owns 16,000 homes, will use the additional funds to bolster its development pipeline. Its three-year plan aims to build 1,000 new homes by 2021.
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Last year, THFC priced its first loan to Irwell Valley Homes, which was valued at £11.8m at an all-in rate of 3.176%. The bond was 1.51% more expensive than the cost of government borrowing.
More than £1bn has been issued through the THFC (Funding No. 3) bond. The aggregator said that just over £60m is left in retained bonds and it expects to lend this money within the next 12 months.
Helen Nicholson, executive director of finance and governance at Irwell Valley Homes, said: “We are delighted to have secured the second drawdown of our loan with THFC at such an attractive rate.”
She added: “This is an important element of Irwell Valley Homes’ funding plan. It will enable us to invest in and increase the supply of affordable homes through our significant development programme, while maintaining our strong financial position.”
Piers Williamson, chief executive of THFC, said: “Today’s success demonstrates once again THFC’s ability to get the best for our borrowers.
“The flexibility of the split deal structure with retained bonds meant we could take advantage of current positive market conditions and low gilt yields to achieve even tighter pricing for Irwell Valley Homes and help them build much needed homes for their communities.”
