Client stories

Investors show strong appetite for bLEND’s first 40-year Social Bond

We’re delighted to have supported bLEND in the issuance of their £75 million Social Bond, after helping them establish their Social Bond Framework earlier this year.

Social impact at its heart

bLEND Funding Plc, established in 2018, is a financial aggregator providing competitively-priced bond finance to housing associations across the UK to support them with the purchase, acquisition, development, repair or improvement of property to be used for affordable housing and the refinancing of existing loans.

bLEND’s parent company is The Housing Finance Corporation (THFC), which was established in 1987, and issues long-term bonds in the sterling capital markets that are on-lent to housing associations. Throughout its history THFC has demonstrated its commitment to the social purpose of housing associations by innovating new products to achieve the best possible terms of funding, allowing its 160+ Housing Association borrowers to grow and meet the demand for affordable housing.

bLEND’s purpose equally has social impact at its core: by providing low-cost, long-term capital markets funding bLEND supports the financial health of the housing association sector and contributes to the building of quality affordable homes. 

bLEND now has over £1 billion of bonds outstanding and announced in May this year that all of its existing bonds will move into its Social Bond Framework, further demonstrating its commitment to embedding sustainability across its portfolio.

bLEND 40-year Social Bond to finance 1,000 new affordable homes

For its latest issuance through its new Social Bond Framework, bLEND turned to NatWest, to support in the role of Active Bookrunner for a long-dated £75 million transaction.   

After approaching key investors and receiving positive feedback from accounts for a potential 40-year tenor for the transaction, bLEND announced the £75 million, 40-year trade, which saw the majority of orders coming in from ESG accounts (83%*). With final books reaching over £210 million, the company set the coupon at 2.467%.

With this social bond bLEND introduced a new tenor to its maturity profile, offering its underlying borrowers the opportunity to tap the longer end of the market which might otherwise be unavailable to them.  bLEND now offers borrowers a range of maturities from 2034 to 2061. 

It was made clear to investors through the preliminary pricing supplement that on publication of the Sustainable Bond Framework, bLEND intends to recategorise the Notes as Sustainability Bonds instead of Social bonds and will apply the net proceeds of the Notes in compliance with such Sustainable Bond Framework.

The bond proceeds will go towards housing association GreenSquareAccord, a recently merged new housing and care organisation providing 25,000 homes in the Midland and the South West of England.

bLEND’s Social Bond Framework aligns to three UN Sustainable Development Goals (SDGs)

In May 2021, bLEND’s parent, THFC, published a Social Bond Framework with the support of NatWest, and converted existing bLEND bonds into social bonds in recognition of the social impact of bLEND’s borrowers.

Vigeo Eiris, which had been appointed as the Second Party Opinion (SPO) for the framework, confirmed that THFC’s Social Bond Framework is aligned to the ICMA Social Bond Principles and to Sustainable Development Goals (SDGs) #1, #8 and #11 with a focus on Affordable Housing, Access to Essential Services, Employment Generation and Socioeconomic Advancement. Vigeo Eiris also said in its SPO that THFC’s “expected Social Benefits are clear and precise, these are considered relevant, measurable, and will be quantified for all the Eligible Loans in the reporting.”

THFC will publish annually a Social Bond report specifically for the financing conducted via the Social Bonds whilst also producing an impact report aligned to the Sustainability Reporting Standards for Social Housing (see below), which THFC and NatWest helped develop alongside other housing associations and lenders.

Sustainability Reporting Standard for Social Housing

The Sustainability Reporting Standard for Social Housing was launched in November 2020 by the ESG Social Housing Working Group – a unique collaboration of 18 banks and investors (including NatWest Group), housing associations, service providers and impact investing organisations, led by Peabody housing association - to help attract ESG investments and ultimately boost the supply of new genuinely affordable homes.

The Standard brings consensus on how to measure and report on ESG performance in the social housing sector and as such also helps reduce the ESG reporting information burden on housing associations.

The ESG reporting standard is based on 12 themes – including “Affordability and security”, Building safety and quality, “Resident voice”, “Resident support” and “Climate change” and “Ecology” – and 48 criteria for ESG reporting by housing associations. The criteria are also aligned to international ESG frameworks and standards including the Sustainable Development Goals (SDGs), the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), and the International Capital Market Association (ICMA) and Loan Markets Association (LMA) Principles. Over 70 housing associations, lenders and investors have signed up as early adopters of the new standard, which is overseen by a new Social and Affordable Housing Sustainability Reporting Standards Board. 

Housing association borrowers can look to the future with confidence

Dominic Brindley, Debt and Financing Solutions, NatWest, said: “We’re excited that we can actively contribute to social, economic and environmental progress in the UK by supporting customers such as bLEND with its very successful issuance of a long dated Social Bond. While increasing the range of maturities now available to bLEND’s borrowers, this transaction also highlights the significant demand towards the long end of the Sterling market as investors continue to have cash to put to work for high quality issuers.”

Dr Arthur Krebbers, Head of Sustainable Finance Corporates, NatWest, added: “bLEND’s 40-year Social Bond highlights yet again the pioneering role the social housing sector plays in the transition to sustainable business practices. The transaction also underlines our ongoing success with Housing providers and financial aggregators in the sector; and we are very pleased that we had the opportunity to support bLEND with strategic insight into its framework earlier this year.”

Piers Williamson, Chief Executive, bLEND, said: “Given the resurgence of inflation as a risk factor, the ability to lock in a 2.467% cost of funds for 40 years is a big deal and allows our borrowers to look to the future with confidence as they focus on the huge challenge of becoming net zero carbon by 2050. bLEND’s total issuance has recently passed £1billion, marking us out as a significant funder to the social housing sector, and we’re delighted to be working with GreenSquareAccord as they exemplify the sector’s growing record of innovation as well as providing homes that are not just affordable but also sustainable.”

James Tarrant, Director of Corporate Finance & Treasury, GreenSquareAccord, said: “We are delighted to have secured a long-term funding package through bLEND with the support of NatWest. This funding will help us deliver our commitment to develop 1,000 new affordable homes a year for some of the most vulnerable people in society.”

*83% of orders were made by signatories of the United Nations Principles for Responsible Investment.


The information provided in this article has been prepared by National Westminster Bank Plc (NatWest) for information purposes only and is subject to change from time to time. The information and views expressed should not be treated as advice or a recommendation of any kind. NatWest makes no representation, warranty, undertaking or assurance of any kind (express or implied) with respect to the adequacy, accuracy, completeness or reasonableness of the information provided and disclaims all liability for any use you, your affiliates, connected companies, employees, or your advisers make of it. NatWest accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However, this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed. 

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