HDFC seals a $ 1.1 billion social loan for affordable housing
Mumbai, August 5, 2022
Mortgage lender HDFC Limited today announced the completion of a $ 1.1 billion Syndicated Social Loan Facility for the financing of affordable housing in India.
The loan has been priced competitively at a margin of 90 bps over SOFR (Secured Overnight Financing Rate), a press release from HDFC said.
"This transaction marks several meaningful milestones, including India’s largest social financing issuance, the largest social loan globally, the first social ECB loan out of India and the largest ECB loan deal from a Housing Finance Company/ private NBFC in India," it said.
The landmark financing further promotes HDFC’s longstanding mission to be the leading provider of housing finance in India. Proceeds from the social loan would go towards financing affordable housing loans," the release said.
Since its inception in 1977, HDFC has financed 9.5 million housing units and has a gross loan book of Rs 6.7 trillion.
"HDFC has been considered as a model for housing finance for countries with nascent mortgage markets," it said.
MUFG Bank, Ltd. (MUFG) is the Lead Social Loan Coordinator for this transaction along with being one of the Mandated Lead Arranger and Borrowers (MLAB). CTBC Bank, Co., Ltd., Mizuho Bank, Ltd., State Bank of India and Sumitomo Mitsui Banking Corporation are the other MLABs and Joint Social Loan Coordinators.
HDFC’s Social Financing Framework is in line with globally-recognised social loan frameworks designed for participants in the sustainability financing market to consistently certify, track and monitor the social impact of financing assets, the release said.
Deepak Parekh, Chairman, HDFC Ltd, said “Affordable housing is a critical component of quality infrastructure as also a growth driver for the real estate industry and the economy at large given its strong linkages to nearly 300 industries.
"It contributes to capital formation, employment, and income opportunities. A boost to affordable housing will play a significant role towards the ‘Housing for All’ objective of the government. The aspiration to own a home is inherent in every household.
“In India, housing will play an important role as a catalyst for growth with increased demand for affordable housing. Combined with India’s growth prospects, I have never been as optimistic about the affordable housing sector as I am today,” he added.