THFC returns to market with 2% deal for three smaller housing associations
THFC has returned to market with a tap of its £1bn+ Funding No.3 bond to raise funds for three community-based housing associations at an all-in rate of 2.01%.
At a spread of 1.35% over Gilts and almost three times oversubscribed, today’s transaction demonstrates investor demand in THFC Funding No.3 – at £1.055Bn outstanding, the largest unguaranteed bond in the sector. Investor confidence reflects THFC’s strong ‘A Stable’ rating, recently affirmed by S&P.
According to Piers Williamson, THFC’s Chief Executive this issuance was “targeted at a small number of community-based Associations, allowing them to invest in their locality and help them create meaningful change, at the same very low long term cost of borrowing enjoyed by their larger housing association counterparts”. Proceeds of the tap will go to three housing associations: £7.5m to Unity Housing Association; £4.5m to Pickering and Ferens; and £7.5m to CcHA (formerly Croydon Churches Housing Association).
Unity HA was established to meet the housing needs of black and minority ethnic communities throughout Leeds, taking a hands on approach to addressing inequality through building sustainable communities. By working to foster new partnerships with local organisations and social enterprises, Unity produces new social and employment opportunities, which in addition to their provision of quality affordable housing contributes to the regeneration of their communities. Today’s loan is their first from the THFC group, and the funds will support new developments of affordable housing including its current programme which is now expanding into Kirklees.
Pickering and Ferens Homes is a trusted housing association for older persons with more than 1,300 properties in the Hull and East Yorkshire region. A winner of a number of housing awards, the organisation is built on strong foundations with many years of history of providing high-quality housing with a focus on supporting independent living and promoting health and wellbeing among its residents and the wider community. THFC previously formed a strong working relationship with Pickering and Ferens Homes after it borrowed funds through the Affordable Homes Guarantee Scheme, run by a subsidiary of THFC. The proceeds of today’s loan will fund Pickering and Ferens’ development plans to build up to 80 new homes over the course of the next two years.
CcHA has been developing quality, affordable homes since it was founded in 1967. Its founding aim was to meet housing need in the borough in response to a speech by the Bishop of Croydon, highlighting the shortage of quality housing in Croydon. Today, CcHA has over 1,400 homes across three boroughs, with a strategic emphasis on providing the highest standard of services to residents. CcHA has already borrowed through THFC’s subsidiary, Affordable Housing Finance Plc, and today’s loan from THFC will go toward their development programme which supports their new ‘ccha2025’ Strategy to deliver a further 50 affordable, good quality, sustainable homes per year, over the next 5 years. Their vision; ‘Delivering on our Promises’ is an integral part of CcHA’s growth ambitions and is embedded through their new values; ‘We Care about our customers, staff, and our wider environment, We Adapt and embrace change to achieve our goals, We are Resilient and effective in challenging times and Our strength is in our unity with Everyone playing their part.’
Piers Williamson, CEO of THFC, said “we are delighted to be providing funding to these three organisations. They each provide targeted and invaluable support in a unique way and demonstrate collectively the vital role Associations play in binding communities together. As we enter tough economic times, their role has never been more important, and today’s transaction goes right to the heart of what THFC is all about.”
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