Location:
India
Investor:
MUFG Bank Ltd. was the lead social loan coordinator 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.
Investment:
Social Housing
Investment Size:
$1.1 billion USD
Impact:
Creating affordable housing with positive knock-on effects in 300 industries.
Housing Development Finance Corporation Limited (HDFC), a leading Indian top mortgage lender, secured a ground-breaking $1.1 billion USD social loan in 2022. This loan, the largest of its kind globally, was orchestrated by multiple major lenders collectively.
Dedicated to mitigating India's housing crisis and aligning with the government's "Housing for all" initiative, HDFC's social project was established with the specific goal of providing financial support to affordable housing initiatives. The entire proceeds from the loan were earmarked for these initiatives.
HDFC's loan facility adheres to international social loan frameworks that consistently validate, track, and oversee the social impact of financing assets, as confirmed by the financier. The utilization of proceeds, objectives, and transparency represents the fundamental principles of social loans, as outlined by the Loan Market Association (see Tese’s guide on social loans).
The loan package was priced at a margin of 90 basis points over the secured overnight financing rate. In this endeavor, MUFG Bank Ltd. acted as the lead social loan coordinator and was also one of the mandated lead arrangers and borrowers, alongside CTBC Bank Co., Mizuho Bank Ltd., State Bank of India, and Sumitomo Mitsui Banking Corp., as per an HDFC statement. Notably, HDFC Ltd. raised the funds through external commercial borrowings (ECBs).
Deepak Parekh, HDFC’s chairman, underscored the broader impact of the loan, stating that affordable housing is not only a crucial element of quality infrastructure but also a crucial driver for the real estate industry and the economy as a whole, with strong linkages to nearly 300 industries. Parekh anticipates that the project will contribute to capital formation, employment, and income opportunities.
Read more on this loan at the Economic Times // Times of India
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