Three sovereign wealth funds and a “major UK pension fund” were among 18 investors in a £100m ‘tap’ bond issue by Blend, a funding vehicle established by The Housing Finance Corporation (THFC).
North West housing association Torus borrowed the £100m at an all-in rate of 2.17 per cent, at a spread of 1.33 per cent over gilts.
The tap issue of its benchmark 2054 bond was four times oversubscribed and takes Blend’s total issuance to more than £750m in two years.
In August, Blend tapped its 2047 bond for a £38m loan to two housing association borrowers – Leeds Federated Housing Association and Ateb Group – at an all-in rate of 1.97 per cent.
Social Housing understands that the sovereign wealth fund investors represent countries from more than one continent, reflecting what THFC described as “new investor interest” in the social housing sector, sparked in part by an appetite for greater ESG investment.
In addition to the £100m for Torus, another £150m of retained bonds were issued, which can be placed in the future on behalf of other Blend borrowers.
Piers Williamson, chief executive of THFC and Blend, said: “With political uncertainty again very much a feature of the bond markets, it’s fantastic to see Blend gaining the attention of investors, and a reflection of the confidence in the housing association sector more broadly.
“Blend can boast not only its solid A2 credit rating, but now an ever-growing track record of successful issuance across a wide range of maturities, which in turn allows our borrowers to reap the rewards in the form of low-cost, long-term funding.”
Peter Fieldsend, chief financial officer at Torus, added: “Being able to access funding through Blend at such competitive rates means we can continue our work building new affordable homes and regenerating communities.
“The flexibility of the model allowed us to take advantage of favourable market conditions at short notice, and we’re thrilled with the result.”