THFC today priced a retained issuance from its 23-year THFC Funding No.3 bond today for Leeds and Yorkshire Housing Association, at an all-in rate of 1.747%. This represents the lowest cost achieved to date.
Coming just two days after THFC’s subsidiary bLEND priced a £37m loan for 33-years at its own lowest ever rate of 1.932%, today’s transaction was priced at a spread over Gilts of 95bps. Credit spreads tightened in the new year as investors showed interest in social housing sector issuance, but today’s record rate was in part due to investor familiarity with the THFC Funding No.3 bond, the largest in the sector at £1.062bn, as well as confidence in THFC’s strong credit (A stable – S&P) and decades of experience.
Proceeds of £7.5m will go to Leeds and Yorkshire Housing Association, a forward-thinking association managing almost 1,600 homes across Yorkshire, and will be used to develop new affordable homes as part of a strategy to build over 200 new homes in three years.
Director of Resources at Leeds and Yorkshire Housing Association, Adam Hutchinson, said “We’re grateful to the team at THFC and our advisors DTP for their support in achieving this result. The great rate achieved will help us deliver our vision of ensuring that all our customers live in a home they love. In particular it will support our plans to deliver over 200 essential new homes in Yorkshire over the next three years.”
Piers Williamson, THFC’s CEO, said “to end the first working week of the year with our lowest ever rates in both bLEND and THFC is quite something! At a time when housing associations are facing immense challenges relating to Covid-19, building safety and stock decarbonisation, every basis point saving helps deliver more new affordable homes or allows our customers to invest in the vital support services they provide which are so badly needed in the current market.”
“At THFC we know that by offering long-term funding to housing associations of all size at the lowest possible rates we enable them to maximise the impact of their business, and ultimately to provide affordable homes to those who need them, and that’s why today’s record-breaking rate of 1.747% is such a huge achievement.”
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