India’s largest mortgage lender, Housing Development Finance Corporation, said it has secured the world’s largest social loan, a $1.1 billion facility to fund affordable housing, highlighting the potential for sustainability-related financing.
The loan package is priced at a margin of 90 basis points above the guaranteed overnight financing rate.
MUFG Bank Ltd. was the lead coordinator of social loans and also one of the mandated lead arrangers and borrowers along with CTBC Bank Co., Mizuho Bank Ltd., State Bank of India and Sumitomo Mitsui Banking Corp., according to an HDFC statement.
“Affordable housing is a critical part of quality infrastructure and also a growth engine for the real estate sector and the economy in general,” said Deepak Parekh, chairman of HDFC.
HDFC’s loan facility complies with international social lending frameworks that consistently certify, track and monitor the social impact of financing assets, the lender said.
Proceeds use, objectives and transparency are among the most important principles of social loans, according to the Loan Market Association.
HDFC’s credit limit and stated target are in line with a core promise of Prime Minister Narendra Modi’s government, which has made ‘housing for all’ a policy objective.
HDFC’s jumbo social loan will add to the volume of sustainably linked debt that has taken a beating this year as companies took a back seat to focus on securing or saving cash amid mounting inflation. Social loans make up a small part of the total sustainable debt market.
–With help from Jacqueline Poh.
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