The Housing Finance Corporation has today priced a £4.5m tap of its 25-year Funding No.3 bond at a record-low fixed rate of 1.998%, with funds to be on-lent to New Gorbals Housing Association.
With a spread over Gilts of 1.41%, the issue was from so-called ‘retained bonds’ issued from THFC (Funding) No 3: one of the largest bonds in the social housing sector. The remarkably low cost of funding demonstrates THFC’s reliability in securing competitively priced finance for its borrowers, even against a backdrop of considerable economic uncertainty. The fixed cost of 1.998% represents THFC’s first ever sub-2% rate for a bond issue. As the leading aggregator for housing associations throughout the United Kingdom, THFC has lent over £150m to 11 Scottish housing associations over the last twenty years.
New Gorbals is a community housing association founded in 1989 to develop high-quality social homes in the Glasgow neighbourhood of the Gorbals. They now own or manage over 2,500 social rent homes, 1,000 of which are new-builds. The association has been instrumental in the regeneration of the area over thirty years. Earlier this year one of their developments, which included social homes, a new central office and a public piazza, was shortlisted for the RICS Social Impact Award.
New Gorbals Housing Association’s Chairperson, Linda Malone said:
“We are delighted that our relationship with THFC is continuing into another chapter of the regeneration of the Gorbals. This time 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, THFC’s CEO, said:
“It is a source of great pride that we are able to once again help New Gorbals access fantastically priced finance to fund their development programme. 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.”
Piers Williamson, Chief Executive: email@example.com
THFC took advantage of record low Gilt yields to price a brand new 32 year £100m Bond, its third issue.
In the week leading up to the General Election, the Government guaranteed aggregator Affordable Housing Finance (AHF) priced a retained.