Environmental Finance's Sustainable Debt Awards 2024

Initiative of the year - social bond: Caisse Régionale de Refinancement Hypothécaire

Targeting mortgage access for low and middle-income individuals in West Africa Caisse Régionale de Refinancement Hypothécaire (CRRH), a regional mortgage provider, secured a €205 million ($223 million) bond to fund loans, with a guaranty from the US International Development Finance Corporation (DFC).

Bank of America Securities (BofA) acted as the sole structuring and lead placement agent on the private placement that will address the problem of short tenors, of less than eight years, and high-interest rates in West Africa's mortgage sector as they are unable to raise sufficient financing in local markets for longer-tenor loans.

This often results in safe and affordable housing being out of reach for many West Africans.

Across the region, more than 60% of the population lives in substandard housing, and demand is growing, with the current population of 110 million projected to double over the next 20 years. CRRH will use the proceeds to make loans to its member banks to provide long-term mortgages.

British Robinson"Prosper Africa was thrilled to be part of this innovative and sustainable CRRH approach to mobilise transparent, market-oriented financing at scale to meet the enormous demand for affordable housing in West Africa," said British Robinson, Prosper Africa coordinator, the US government initiative that facilitated the deal.

"The ability to access global markets for longer tenor and affordable financing will help create generational wealth through homeownership."

The countries covered by the loan are Benin, Burkina Faso, Côte d'Ivoire, Guinea-Bissau, Mali, Niger, Senegal and Togo.

BofA also facilitated one-on-one educational conversations with institutional buyers for the loan.

"Far too many people in West Africa are challenged with little access to affordable housing, making them particularly vulnerable to impacts of climate change and other natural disasters," said Tony Griffith, managing director at BofA. "We're proud that this bond will help meet the mortgage needs of thousands of families across eight different countries in the region."

One Sustainable Debt Awards judge applauded the bond's "capital focused on the critical need for affordable housing" and its "focus on Africa, which is generally less available in the market," while also noting it's a "great example of blended finance".

"Good to utilise the merit of the West African Monetary Union region (CFA franc) and support from a US agency to support homeownership, wealth accumulation and improved housing quality in West Africa," added another.

Deal highlights:

Issuer: CRRH
Size: €205 million ($223 million)
Maturity: 2040
Coupon: 4.207%
Use of Proceeds: Affordable housing
Lead Manager: BofA
Credit Rating: Moody's (Aa1)
Other highlights/notable features: Private placement with international investors pursuant to a US special purpose entity. First capital markets application of DFC Guaranty for a Euro-denominated security.