Bond Awards 2020

Social bond of the year - corporate - MORhomes

MORhomes secured the social bond of the year award for corporates after finalising a £250 million ($322 million) issue to assist in building social housing in the UK.

Set up by over 60 housing associations, MORhomes is a centralised borrowing vehicle for the social housing sector which remains owned and run for the benefit of not-for-profit housing associations.

Deal highlights:

Issuer: MORhomes
Date of issue: February 2019
Size: £250 million ($322 million), subsequently tapped by £38.6 million in October and £12.5 million in November
Maturity: February 2038
Coupon: 3.4%
Use of proceeds: Acquisition, construction or maintenance of affordable housing by UK not-for-profit housing associations
External review: Sustainalytics
Lead managers: Barclays, JP Morgan, Morgan Stanley (initial issue only); NatWest (both taps)
Credit rating: S&P Global (A-)

Neil Hadden, chair of MORhomes, said the social bond "shows that the sector continues to innovate in finding new ways to access the funding to support the development of new homes".

The initial social bond, issued in February 2019, was used to fund 11 loans to housing associations. In October, MORhomes tapped the bond for a further £38.6 million, with another £12.5 million tapped in November. These taps helped fund loans to two other housing associations.

In nominating the bond, Barclays – one of the lead managers – said that the debut social bond from MORhomes was a "pioneering transaction in several respects. In particular, as well as launching a new vehicle to support tackling the UK housing crisis, it was the first social housing sector bond to be priced under a social framework."

In October 2018, it outlined its Social Bond Framework. Second opinion provider, Sustainalytics, described the framework as "credible and impactful" and aligned with the four core elements of the Social Bond Principles.