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AHF prices two more loans of European money
The government-backed aggregator, Affordable Housing Finance (AHF), has priced two transactions worth a combined £95m from its European Investment Bank (EIB) loan.
AHF agreed terms with Yorkshire Housing on Monday for the association to draw down £70m, with a maturity of three years. It will be accessed in December and has been priced at a fixed rate of 1.85%, only 0.01% more expensive than government borrowing.
Guy Millichamp, director of finance at Yorkshire Housing, said: “This is a great boost to help us provide much-needed affordable homes across Yorkshire. The funding unlocks the next phase of our programme to provide 3,000 new homes in the region.”
On Wednesday, Orbit South drew down £25m from its existing EIB loan priced at a fixed rate of 1.7% for 10 years.
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Jonathan Wallbank, treasury director at Orbit, said: “As the second-largest developing housing association, Orbit is committed to building homes that meet the needs and aspirations of our customers now and in the future.
“This low-cost funding will support our target of providing 12,000 much-needed new homes by 2020.”
Piers Williamson, chief executive of AHF and of The Housing Finance Corporation (THFC), was bullish at the Social Housing Annual Conference this week about THFC’s relaunch, which is anticipating the end of AHF.
He told the conference: “THFC, doing what we have done for 30 years, has just done a deal for two housing associations [in July this year] with a spread of 1.2% over government gilts, with an effective asset cover of 110% MVT.
“We have perpetually, since time immemorial, been criticised for being inefficient in asset coverage. But this is what we’ve just done. We just get on and do things, not necessarily talk about them.”
