Investor relations

Investing in positive social outcomes.

Social and Sustainability bonds

Social bonds raise funds for projects that support a social good or social purpose.

By issuing social bonds, NHFIC provides community housing providers with longer-tenor and lower-interest loans, attracting investment and ensuring the sustainable growth of the sector. Social bonds also help our community housing partners better provide social and affordable housing for their tenants.

NHFIC is the largest Australian issuer of social bonds. As at 30 June 2022, NHFIC social bonds account for around 15% of all AUD social bonds.

Our bonds are measured against a sustainability bond framework and are independently assured both pre-issuance and post-issuance.

The NHFIC's Sustainability Bond Framework aligns to the UN Sustainable Development Goals and International Capital Market Association's Social Bond Principles.

How we work

NHFIC uses a bond aggregator model to issue social and sustainability bonds in the capital market. The proceeds of a social bond issuance are used to provide loans to registered community housing providers (CHPs).

This model enables NHFIC to provide concessional funding arrangements to CHPs by providing lower-cost and longer-term finance solutions compared to traditional sources of funding. The issuance of social bonds also facilitates greater private and institutional investment in the sector.

The Affordable Housing Bond Aggregator (AHBA) uses this ‘pass-through’ model to provide greater funding certainty and lower finance costs to CHPs. This assists CHPs to expand their operations and the supply of affordable housing. 

To support the AHBA, the Australian Government has provided a $1 billion line of credit that NHFIC may use to advance initial loans to CHPs prior to issuing bonds. Loans financed by the line of credit will subsequently be refinanced by NHFIC issuing a social bond when a critical mass of such loans have been advanced.

The bond aggregator model has international precedent. It is currently used in countries such as the UK where it operates as a tried, tested and successful means of providing efficient finance for social and affordable housing.

Investors have the opportunity, through the purchase of social bonds issued by NHFIC, to combat the significant and prevailing funding gap in Australia’s community housing sector. 

For any bond or investor related questions, please email bonds@nhfic.gov.au

Awards and recognition

Social and Sustainability bond issuances

By issuing Social and Sustainability bonds NHFIC is able to:

  • progress its mandate to help low income and vulnerable Australians access affordable housing. Investors in NHFIC’s social bonds are helping to solve the housing crisis faced by these Australians
  • attract attention to the acute shortage of affordable housing in Australia
  • encourage investors to support the development of the sustainability and social bond markets in Australia.

Bond issuances to date

Since March 2019, NHFIC has issued A$2.2 billion in social bonds, making it one of the largest issuers of social bonds in Australia.

NHFIC has issued six bonds:

  Volume ESG Bond type Tenor Initial issue date
Bond 1 A$315m Social 10 years 28 March 2019
Bond 2 A$315m Social 10.5 years 27 November 2019
Bond 3 A$695m Social 12 years 29 June 2020
Bond 4 A$408m Sustainability 15 years 2 June 2021
Bond 5 A$362m Social 10 years 15 June 2021
Bond 6 A$100m Social 10 years 15 June 2021

Social Bond Reports

NHFIC's Social Bond Reports provide information on the use of proceeds from NHFIC’s social bond issuances and demonstrates the impact that its transformative financing is achieving in improving housing outcomes. The reports form a key disclosure requirement under NHFIC’s Sustainability Bond Framework.

Sustainability Bond Framework

NHFIC has developed a Sustainability Bond Framework aligned with the UN Sustainable Development Goals (SDGs) and the International Capital Market Association’s Social Bond Principles (SBPs). NHFIC intends to expand the Framework to cover issuance of sustainability and/or green bonds in the future. The Framework governs:

  • The use of proceeds of bond issuances
  • The process for evaluation and selection of AHBA loans financed or refinanced by the bond
  • The management of the bond proceeds
  • The form of reporting NHFIC will undertake.

Download the Sustainability Bond Framework (PDF).

Pre-issuances statements

NHFIC follows market best practice by submitting the Framework and its processes for external review by an independent assurance provider.

Ernst & Young provides pre-issuance assurance confirming that NHFIC bonds are in compliance with the Sustainability Bond Framework and nominated loans for the bonds meet the identification, management of proceeds and reporting principles of the SBPs.

NHFIC commissions and publishes annual external assurance on its bond issuances. The assurance reports are included in NHFIC's Social Bond Report released annually in October. 

 

Pre-Issuance Assurance Statements

 

Refer to the Social Bond Reports for Post-Issuance Assurance Statements.