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NHFIC goes big with its first social bond

The Living Space development in Cockburn, Western Australia.

The federal government’s National Housing Finance and Investment Corporation claims to have issued the largest social bond in Australia.

The $315 million in funds raised by the NHFIC’s first social bond will be loaned to community housing providers of social and affordable housing in Australia.

Offering providers 10-year loans with an interest rate of less than 3 per cent, the social bond will mean cheaper, long-term finance for community housing providers than they can typically access through traditional bank finance.

Providers involved in the first round of loans include BlueCHP, CHL, Compass, Evolve, Hume and Unity.

The NHFIC expect the bond to result in up to 300 new affordable rental dwellings as well as enhanced support services and ongoing maintenance.

NHFIC chief executive officer Nathan Dal Bon said he was pleased to see strong investor interest both internationally and domestically for its first affordable housing bond, which he said was four times oversubscribed.

Welcoming the announcement, PowerHousing Australia chief executive officer Nicholas Proud said an affordable housing bond issue of this size is an “important step” to boost the numbers of affordable homes financed.

“NHFIC’s inaugural issue proved a resounding success, with an attractive mix of credit fundamentals and social bond verification drawing demand from a global audience,” said head of DCM Syndicate Asia Pacific, Tim Galt. UBS was a joint lead manager on the finance, along with ANZ.

“The $315 million new issue is an impressive debut and provides investors with an additional diversification opportunity within the high-grade Australian debt capital market.”

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