THFC issues £60.5m bond tap
The Housing Finance Corporation (THFC) has issued a £60.5m tap bond for four housing association borrowers.
The tap of the bond aggregator’s THFC Funding No.3 issue was priced at a spread of 143 basis points over gilts, giving an all-in cost of funds of 3.344 per cent.
The four borrowers were Wales & West, Trent & Dove, Hexagon and United Welsh.
Despite a recent widening of spreads as a result of a perceived increase in risk in the social housing sector, the tap’s all-in cost was comparable to recent own-name issues by larger landlords, such as Optivo’s £250m bond, which was priced at a coupon of 3.283 per cent.
Piers Williamson, chief executive of THFC, said: “Housing associations are increasingly dependent upon capital markets as banks shy away from long-term deals.
“This surge in HA activity, as shown recently, can widen overall credit spreads. However, THFC has weathered these conditions to deliver a respectable pricing, on a large bond. This will help recognise the sector’s collective goal to deliver competitively priced long-term funding, to support the borrowers’ business plans and the delivery of more affordable homes across the country.”
The presence of two Welsh borrowers comes after a group of Welsh housing associations met investors in London in a bid to secure development funding. That meeting came in the wake of the cessation of talks with the European Investment Bank on a £200m funding vehicle.
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