Environmental Finance's Bond Awards 2023

Social bond of the year - agency: Freddie Mac

As part of its Impact Bonds initiative, federally-backed home mortgage company Freddie Mac issued $92.8 million in social bonds, supporting affordable housing for over 1,500 senior citizens across four housing properties in Arizona.

More than half the units are affordable, housing senior residents with incomes at or below 50% of area median income, according to Freddie Mac's affordability guidelines.

The acute shortage of rental housing for low- to moderate-income senior citizens who are on fixed incomes and struggle to keep up with inflation creates a need for this type of transaction, according to Freddie Mac.

The loans, originated by the Berkadia Seniors Housing & Healthcare team at Berkadia Commercial Mortgage – an approved Freddie Mac Multifamily Seniors Housing lender – are for properties owned by Christian Care, a provider of non-profit housing and healthcare services for low- and moderate-income senior citizens in Arizona.

"Freddie Mac is committed to affordability, and social impact bonds advance our most meaningful, mission-driven work. We will continue to utilise our innovative securitisation capabilities to support affordable multifamily housing in underserved communities," commented Robert Koontz, Senior Vice President for Multifamily Capital Markets at Freddie Mac.

Freddie Mac's broader Impact Bonds initiative is designed to attract ESG capital to its mission-driven multifamily housing efforts.

Deal highlights:

Issuer: Freddie Mac
Size: $92.8 million
Maturity: February 2032
Coupon: 2.76%
Use of proceeds: Affordable housing
External review: Sustainalytics
Lead manager: Wells Fargo Securities
Co-manager: CastleOak Securities