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New Gorbals Housing Association has received £4.5m from The Housing Finance Corporation (THFC), which tapped its 25-year bond at a record low fixed rate of 1.998%.
THFC achieved a spread over gilts – the cost of government borrowing – of 1.41% from retained bonds under its (Funding No 3) Bond, one of the largest bonds in the social housing sector.
The issue, completed on 29 June, represents THFC’s first ever sub-2% rate for a bond issue and an improvement on an all-in rate of 2.25% it secured in May.
New Gorbals, which owns or manages 2,500 social rent homes, said the funds will be used to support development of more social homes.
Linda Malone, chair of New Gorbals, said: “The funds will be used to support the development of 33 social homes that form a landmark entrance building from Glasgow’s city centre, and also to boost the internal modernisation programme of our 300 high-rise flats at Riverside.
“We will be making an immediate start to the new build and complete in Spring 2021.”
Piers Williamson, chief executive of THFC, said: “New Gorbals have an exemplary track record of successful urban regeneration, achieving concrete positive outcomes for their tenants and community.
“Today’s rate of 1.998% is testament to THFC’s unique capacity to help its borrowers maximise their social impact through low-cost funding.”
The latest issue takes THFC’s lending to £150m to 11 Scottish associations over the past 20 years.