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Aggregator issues one of its cheapest ever bonds
Social housing bond aggregator The Housing Finance Corporation (THFC) has issued an £11.8m bond at one of its lowest ever prices.
The aggregator provided the money to Greater Manchester-based Irwell Valley Homes at an all-in interest rate of 3.176%, which was 1.51% more expensive than the cost of equivalent government borrowing.
Irwell Valley, which manages 7,500 homes, plans to use the money to expand its development programme, including providing more homes for homeless people and people with mental illnesses.
Piers Williamson, chief executive of THFC, said: “With certain housing associations keen to acquire long-term funding before the ‘shadow’ of Britain’s exit strategy is determined, THFC is delighted to have secured another fantastic deal for one of its customers.”
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Helen Nicholson, executive director of finance and governance at Irwell Valley, added: “We experienced a smooth and quick credit approval with THFC as well as a straightforward process to agree the legal documentation.
“THFC have been responsive and helpful to our queries and have communicated with us throughout, keeping us fully engaged as we moved through the stages of securing our new funding.
“We are really pleased to have this new funding in place so we can deliver the new homes targets we have in our Irwell Valley plan.”
The bond was delivered shortly after THFC’s subsidiary, Blend, delivered its second bond issue, raising £30m for a housing association at a rate of less than 3%.
It completed on 13 March, the same day the government committed to a £3bn affordable housing guarantee scheme, through which housing associations could access cheaper funding from the capital markets.
The previous version of this scheme was managed by THFC, which delivered billions of pounds of cheap borrowing for social housing providers through it.
Mr Williamson added: “Both political uncertainties and subsequent ‘economic tumbleweed’ have not deterred THFC from doing what it does best. Indeed, within only a week, we have produced two more tailored funding opportunities to benefit both borrower and investor.”
