Sector-leading aggregator THFC achieves tighter spread for borrower in retained bond sale
The Housing Finance Corporation today sold £13.2million of retained bonds to be on-lent to housing association Irwell Valley Homes, based in Greater Manchester. The THFC (Funding No. 3) bonds were priced at a spread over Gilt of 120bps against the backdrop of a positive post-election market.
With over thirty years’ experience as an aggregator in the social housing sector, THFC was able to achieve an effective rate of 2.286% on the retained bonds just a year after pricing the first £11.8m tranche at 3.176%. At over £1billion issued, Funding No. 3 bond is one of the largest bonds in the social housing sector and consistently achieves competitive pricing, reflecting its perceived liquidity as well as THFC’s A grade credit rating. There remains just over £60m in Funding No. 3 retained bonds, which THFC expects to on-lend within the next year.
Irwell Valley Homes maintains a sizeable housing stock across a variety of tenures, as well as providing specialist services, including to the homeless or those with mental health issues. Helen Nicholson, Executive Director of Finance and Governance at Irwell Valley Homes, said:
“We are delighted to have secured the second drawdown of our loan with THFC at such an attractive rate.”
Nicholson added: “This is an important element of Irwell Valley Homes’ funding plan. It will enable us to invest in and increase the supply of affordable homes through our significant development programme, whilst maintaining our strong financial position.”
THFC’s Chief Executive, Piers Williamson, said:
“Today’s success demonstrates once again THFC’s ability to get the best for our borrowers. The flexibility of the split deal structure with retained bonds meant we could take advantage of current positive market conditions and low gilt yields to achieve even tighter pricing for Irwell Valley Homes and help them build much needed homes for their communities.”
THFC also issues bonds through its subsidiary bLEND, which is similarly well-placed to offer quick speed to market under its £2billion MTN programme.
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