Housing finance aggregator bLEND has expanded into the Northern Irish social housing sector as part of an £85m double-tranche transaction for two new borrowers.
bLEND, a subsidiary of £7.9bn mutual lender The Housing Finance Corporation (THFC), has tapped its 2047 bond for £35m and its 2054 bond for £50m for Midlands-based Community Housing Group (CHG) and Choice Housing Ireland respectively.
Choice Housing is bLEND’s first Northern-Ireland-based borrower.
The transaction is also understood to be the first social bond for a Northern Irish housing association, following the issuance in line with bLEND’s recently established Social Bond Framework.
The framework also aligns to the Sustainability Reporting Standard for Social Housing, a sector initiative that articulates and demonstrates the housing association’s environmental, social, and governance (ESG) credentials.
While both taps were issued on a spot basis, the £50m will be lent to Choice Housing on a 12-month deferred basis at an effective rate of 2.14%.
This represents the tightest level yet achieved by bLEND for a deferred drawdown and reflects its new bespoke deferred drawdown offering, inaugurated in July with a £10m retained bond sale for Valleys to Coast.
bLEND says this offering was developed to give borrowers greater certainty over pricing in a market where deferred premia can be variable and hard to gauge.
The transactions bring bLEND’s total issuance to £1,183m, with its recently published 2020/21 annual report detailing the strength of its recent growth.
‘Opening up new opportunities’
Piers Williamson, CEO of bLEND and parent company THFC, said: “bLEND’s steady growth is opening up new opportunities for our borrowers, and today’s first double-tranche issue demonstrates that.
“Not only does bLEND provide quick and easy access to long-term funding at very competitive rates, but it now offers a reliable deferred drawdown option, allowing our borrowers to take advantage of the current rates environment to meet future funding needs.
“This is a core part of bLEND’s model and is central to the sector’s capacity to respond confidently to the major challenges of decarbonisation, fire safety, and the development of truly affordable homes.”
CHG & Choice Housing
CHG, which operates 6,000 homes across Worcestershire, was formed through a stock transfer at the turn of the millennium.
The association provides affordable housing, including dedicated housing provision to support independent living for over-55s.
The new bLEND loan marks its entry to THFC group, with proceeds going toward its three-year plan for investing in stock quality and frontline service delivery.
David Knowlton, Finance director at CHG, said: “Community Housing is delighted to join bLEND with this £35m loan that will underpin our new 2021-2024 Corporate Plan.
“This plan commits us to providing an additional 1,000+ development units in the coming years, enabling us to respond to existing waiting lists.
“The bLEND team, along with our own advisors, Savills and Trowers & Hamlins, have been exceptional in getting this deal away at such a fantastic rate.”
As an existing borrower from THFC group, Choice Housing’s bLEND loan has been seen as a strengthening of a long-standing relationship and noted for bLEND’s entry to the Northern Irish social housing sector.
Operating over 12,000 units, Choice Housing’s mission is to enrich lives through great homes, services, and communities.
Michael Rafferty, Choice Housing’s director of Finance and Resources, said: “We are delighted to be joining bLEND and welcome its entry to the Northern Irish sector.
“Being able to lock-in current rates to meeting future funding needs is vital for us in mitigating risk, and bLEND provides that with ease and speed, supporting us as we continue to lead the way in building a new type of housing association.”
The Housing Finance Corporation (THFC) is the UK’s leading affordable housing aggregator, with £7.87bn of lending to around 160 housing associations in England, Wales, and Scotland.
bLEND is a subsidiary of THFC established in 2018.
Image: 89stocker/Shutterstock
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