Two new social bonds issued as NHFIC bonds hit $2 billion

The National Housing Finance and Investment Corporation (NHFIC) has finalised $462 million of social bonds, taking total issuance to $2 billion since the organisation’s establishment three years ago.

The new 10-year social bonds include a fixed-rate note of $362 million and NHFIC’s first floating-rate note of $100 million. The social bonds were more than two times oversubscribed and continue to build NHFIC’s investor base with 28 investors taking up the fixed-rate bond and 15 investors in the floating-rate note, with both local and offshore investors participating.

Eight community housing providers will receive funds from NHFIC’s $362 million fixed rate bond, financed with 10-year fixed rate interest only loans. The community housing providers SGCH Group, Mission Australia, Unison, Common Equity VIC, Foundation, Pacific Link, HCA SA and HCT are supporting more than 1,000 new and over 2,800 existing homes in NSW, Victoria, Tasmania, Western Australia and South Australia.

The bond is expected to save the participating housing providers more than $97 million in interest payments over the next 10 years.

Assistant Treasurer and Minister for Housing Michael Sukkar said the new social bonds will continue the work NHFIC is doing in supporting the construction of new affordable houses.

“The latest round of social bonds will enable the vital work of community housing providers to continue to fund more affordable and social housing,” Minister Sukkar said.

“Over the last three years, the Morrison Government’s NHFIC has issued $2 billion worth of social bonds, which has meant more investment in the community housing sector and more homes being built for those that need them.”

The latest social bonds follow NHFIC’s raising of $343 million last month with its first 15-year sustainability bond.