You are viewing 1 of your 1 free articles
Aggregators raise £35m at less than 2.5%
Two bond aggregators run by The Housing Finance Corporation (THFC) have struck deals worth a combined total of £35m both at an interest rate below 2.5%.
THFC (Funding 3), a funding vehicle owned by THFC, issued £13.5m of retained bonds to be split between two of its borrowers, Harrogate Housing Association and Newport City Homes, with a yield of 2.41%, which is 1.48% above the rate of government borrowing.
Blend, also run by THFC, tapped its existing 28-year benchmark issue for an additional £20m to go to existing borrower Wales and West Housing, with an interest rate of 2.39%, 1.43% higher than government borrowing.
Both deals represent some of the cheapest bond transactions in social housing this year, with the previous lowest reported by Inside Housing being Clarion’s £250m bond issued in January, which was priced at 2.72%, which is 1.48% higher than government borrowing.
READ MORE
The THFC (Funding 3) deal, which was struck at the end of last month, will see existing borrower Harrogate Housing Association borrow £1.5m over a 25-year funding period. It is a top-up to an existing THFC loan, and will be covered by the association’s surplus stock.
The Newport City Homes deal is worth £12m and follows from their recent private placement.
Piers Williamson, chief executive of THFC, said the deal with Harrogate Housing Association represented THFC “getting back to its roots” by supporting small housing associations developing affordable homes in their local communities and “at some of the lowest borrowing rates we have achieved in our 32-year history”.
The THFC (Funding 3) deals were followed by the successful tapping of Blend’s £250m loan, to raise £20m for existing borrower Wales and West across 28 years. The funding tranche was double subscribed, with interest from one new sovereign fund investor.
Wales and West have now borrowed a total of £110m through Blend in three separate transactions. In April, THFC borrowed £20m for Wales and West over 35 years at a rate of 2.92%, 1.43% more expensive than the cost of equivalent government borrowing.
Stuart Epps, executive director of resources at Wales and West, said: “Utilising Blend has permitted us to take advantage and lock in on a long-term basis some of the lowest interest rates we have ever seen. This helps us deliver more affordable homes throughout Wales.”
