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Scottish association secures funding via aggregator’s first sub-2% bond issue
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.
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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.
