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Aggregator taps maiden social bond at record-low spread
Social housing bond aggregator Blend has raised £35m via its new Social Bond Framework with its tightest credit spread to date.
Social housing bond aggregator Blend has raised £35m via its new Social Bond Framework with its tightest credit spread to date #UKhousingBlend, part of The Housing Finance Corporation (THFC), tapped its 2054 bond for £35m at a spread of 108 basis points over gilts, the government cost of borrowing. The all-in rate attached to the deal was 2.45%.
It comes after THFC announced earlier this month that it was transferring £1bn of existing debt to its new Social Bond Framework. The £35m raised for Valleys to Coast housing association marks the first issuance through the new framework.
Valleys to Coast, which manages more than 5,800 homes in South Wales, has retained £10m of the funding on a deferred basis. The association said it will use the funding to refinance existing debt and maintain a strong financial profile.
The transaction means Blend’s total issuance has now topped £1bn,with £195m issued in 2021 alone.
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Claire Marshall, corporate director of finance, governance, strategy and performance at Valleys to Coast, said: “As the conversation turns to how the country emerges from the pandemic, the role of housing associations will be more important than ever and we are well placed to meet the need for truly affordable housing.
“Securing this low-cost, long-term funding through Blend will help us to meet our ambitious 10-year corporate plan objectives and to maximise our investment in our homes and communities.”
Piers Williamson, chief executive of Blend, said: “It’s fantastic to see Blend reach £1bn in half of the time originally planned and it reflects both the design of Blend’s model, which gives housing associations flexibility without compromise on price, and the hard work of everyone in the Blend team.
“We’ve now converted all Blend bonds into social bonds, reinforcing the focus on social impact which sits at the heart of Blend. It’s great to see the positive response from the sector, but too the knock-on effect on pricing, which enables us to secure a great rate for associations like Valleys to Coast, who do such important work for their communities.”
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