The National Housing Finance and Investment Corporation (NHFIC) is pleased to announce its second bond issue of $315 million.
The funds raised by the bond will be loaned to community housing providers (CHPs) to support the financing of over 2000 properties across Victoria, NSW, Queensland, Western Australia, and South Australia, including supporting the supply of more than 360 new social and affordable dwellings.
The second NHFIC bond will pass on the benefits of strong investor demand by providing a fixed rate of 2.07 per cent for 10½ year interest only loans to the CHPs, which provide subsidised housing. This is estimated to save those CHPs supported by NHFIC’s bond around $50m in interest payments over the next 10 years.
The new NHFIC bond will support loans to seven CHPs including: Bridge Housing ($51.14m NSW), HousingFirst and the Port Phillip Trust (total $72m Victoria), Haven Home Safe ($65m Victoria), Housing Choices Australia ($55m Victoria), Churches of Christ ($4.86m Queensland), Foundation Housing ($35m Western Australia) and Anglicare SA ($32m South Australia).
NHFIC CEO, Nathan Dal Bon said: “NHFIC is very pleased with the strong level of demand from both local superannuation funds and offshore investors for its bonds and to see CHPs from around Australia benefitting from NHFIC’s finance.
“Superfunds have an increasing desire to invest in social and affordable housing in Australia and NHFIC’s bonds provide them with an opportunity to do this at scale.
“These bonds have also drawn commitments from significant international investors which is further evidence of community housing emerging as a new investment asset class in Australia,” Mr Dal Bon said.
“This brings the total value of loans the NHFIC Board has approved over $830 million in the 18 months since its establishment, supporting the delivery of more than 1000 new, and 3600 existing, social and affordable homes, ultimately benefiting tenants on lower incomes,” Mr Dal Bon said.
Industry superannuation funds Cbus and UniSuper have supported both of NHFIC’s bonds.
Cbus CIO Kristian Fok said: “Cbus is delighted to once again support NHFIC as a cornerstone investor in their successful second affordable and social housing bond issuance. It is fantastic to see the tangible impact that NHFIC is having for Community Housing Providers by creating savings through lower interest costs and through construction of social and affordable homes.”
“As the leading super fund for the building and construction sector we are pleased to invest in NHFIC bonds that meet our investment risk-return criteria and fund new housing construction for Australians in need,” Mr Fok said.
NHFIC would like to acknowledge the contribution of ANZ, UBS and Westpac (Joint Lead Managers) and King & Wood Mallesons (legal advisers). In addition, NHFIC thanks the state governments for their cooperation in enabling the transactions with CHPs.
ANZ Head of Sustainable Finance, Katherine Tapley said: “Social and affordable housing is attracting more interest from investors as a standalone asset class given the bonds provide investors an opportunity to deploy capital towards essential social services. Investors globally are keen to mobilise capital in assets that not only help provide environmental benefits but address core social needs.”
UBS Head of APAC DCM Syndicate, Tim Galt said: “Now, moreso than ever, the global investor community is focused on the social impact of investment decisions. This is impacting the way in which global capital is deployed and the projects that are being financed across sectors. With over A$1.20 billion of demand for yesterday’s A$315 million transaction, the social benefits NHFIC provides Australian Community Housing Providers (via the Affordable Housing Bond Aggregator) are clearly attracting the global investor base.”
Westpac’s Head of Frequent Borrowers and Syndicate, Allan O’Sullivan said: “NHFIC’s Social Bond series 2 has once again highlighted the growing investor appetite for ESG assets while offering diversification given the sovereign guarantee structure. Series 2 was again very well received by the market which bodes well for NHFIC as they become a more established issuer in the Australian dollar debt markets. Westpac is proud to be involved in a strategic initiative that supports improving outcomes in the affordable housing sector.”
The Community Housing Industry Association CEO Wendy Hayhurst said: “The NHFIC interest rate is significantly below the rates at which the community housing industry can typically borrow and means our members can put more money into building new homes. Let’s hope NHFIC’s first two social bonds are the beginning of many more to come.”
PowerHousing Australia CEO Nicholas Proud said: “The launch of the second bond issue demonstrates the emerging interest from investors in an environmental, social and governance impact strategy that will support social and affordable housing delivery across Australia.
“The success of NHFIC in delivering two bond issues in less than a year is a beacon of confidence from investors who today are looking globally for a government-backed, long-term safe harbour with the delivery of an assured social impact outcome,” Mr Proud said.
NHFIC is an independent Commonwealth entity that operates the Australian Affordable Housing Bond Aggregator which provides cheaper and longer-term secured finance for community housing providers by issuing bonds in Australia’s debt capital markets.
Ben Haslem, Wells Haslem Mayhew (for NHFIC) | email@example.com | 0408 887 742
Turi Condon, Strategic Advisor – Corporate Affairs, NHFIC | firstname.lastname@example.org | 0409 304 607