Community housing providers gain crucial investment funding

The federal government-backed National Housing Finance and Investment Corporation (NHFIC) has finalised its third and largest social housing bond.

National Housing Finance and Investment Corporation CEO Nathan Dal Bon

The federal government-backed National Housing Finance and Investment Corporation (NHFIC) has finalised its third and largest social housing bond with a $562m fundraising backed by industry super funds and international investors.

Industry super funds, including construction industry fund Cbus and UniSuper, were major subscribers to the latest bond issue, NHFIC chief executive Nathan Dal Bon told the Australian. Cbus has invested $49mn in the bond.

Health industry super fund Hesta was also a big supporter of the bond issue through the Pendal Group.

“Cbus and UniSuper have been constant supporters of our bonds,” Mr Dal Bon said.

“It’s pleasing to see Hesta come forward as well this time.”

The funding will go to support 10 community housing providers in NSW, South Australia, Tasmania and Victoria, financing more than 2700 properties including 775 new dwellings.

Mr Dal Bon said the success of the fund raising was “further evidence of Australia’s community housing sector emerging as a new investment asset class”.

The latest fund raising means that NHFIC has raised almost $1.2bn in social bonds since its first issue in March last year, making it the largest issuer of social bonds in Australia.

“There is a lot of talk about how to channel superannuation money into housing and we have managed to do that through our three bond issues,” Mr Dal Bon said.

“Each of our three bonds leverages superannuation money which is passed directly through to provide social housing to support Australians most in need at such a challenging time.

The bond will provide community housing providers with 12 year fixed rate interest only financing of 2.06 per cent.

Mr Dal Bon said the bond would save the community housing providers more than $80m in interest payments over the next 12 years.

ANZ, UBS and Westpac were joint lead managers of the bond raising.

Tessa Dann director of sustainable finance at ANZ, said NHFIC’s use of social bonds to tap investor capital for community housing was “critical given the impact of the COVID-19 pandemic on the ability of people to remain in housing.”

Westpac executive director Allan O’Sullivan said the support for NHFIC’s latest issue “reinforced the depth of the market for social investments” in Australia.

He said the move also boosted the agency’s social bond platform.

The housing providers include Argyle Community Housing (NSW), BaptistCare (NSW and ACT), Bridge Housing (NSW), Common Equity Housing (Victoria), Junction and Women’s Housing (SA), Mission Australia Housing (NSW) and Housing Choices Tasmania.