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Bond aggregator hits £1bn milestone

Bond aggregator The Housing Finance Corporation (THFC) has passed the £1bn milestone on its third funding vehicle.

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Picture: Getty
Picture: Getty
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Bond aggregator The Housing Finance Corporation (THFC) has passed the £1bn milestone on its third funding vehicle #ukhousing

The aggregator has been issuing bonds for housing associations from THFC Funding No 3 for five years.

It is close to the group’s largest bond, which was issued with a government guarantee by its subsidiary Affordable Housing Finance and was worth £1.3bn.

In its latest deal, THFC issued £83m worth of bonds for housing associations including Bromsgrove District Housing Trust (BDHT).

The deal was priced at 1.63% more expensive than the cost of government borrowing, at an overall cost of 3.447%. It was three times oversubscribed with investors, according to THFC.

The aggregator also said it did not have to pay a ‘new issue premium’ to sell the bonds, as might be expected in times of uncertainty.

Piers Williamson, chief executive of THFC, said: “The outlook as Brexit day approaches becomes potentially bipolar, with hard Brexit still a possibility, but alternatively the distinct possibility of a protracted political can-kicking session.

“Delivering long-term fixed cost certainty for borrowers makes eminent sense.”

According to the 2018 global accounts released by the Regulator of Social Housing, THFC and its group companies now lends to around 70% of the housing association sector.

Mark Robertson, chief executive at BDHT, said: “Following a strategic debate with my board in December, we decided it made perfect sense to advance our funding requirement ahead of Brexit.

“THFC and our advisors have worked superbly well with us to fast track our funding requirement for competitive rate certainty and long-term funds and we are really delighted with this outcome.”

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