A $1.1 billion "social loan" is raised by HDFC to finance the affordable housing sector

8 Aug 2022 , 07:56 AM

The largest social loan in history, worth $1.1 billion (about Rs8,700 crore) and secured by Housing Development Finance Corp, the largest mortgage lender in India, is being used to finance affordable housing, highlighting the potential for financing that is connected to sustainability.

The pricing of the package includes a 90 basis point margin over the secured overnight financing rate. According to a statement from HDFC, MUFG Bank Ltd., CTBC Bank Co., Mizuho Bank Ltd., State Bank of India, and Sumitomo Mitsui Banking Corp, were the mandated lead arrangers and borrowers as well as the main social loan coordinator.

According to Deepak Parekh, Chairman of HDFC, “affordable housing is a crucial component of quality infrastructure and also a development driver for the real estate industry and the economy at large.”

According to the financier, HDFC’s loan program adheres to worldwide social lending frameworks that consistently certify, track, and monitor the social impact of financing assets. According to the Loan Market Association, the three fundamental tenets of social loans are the use of proceeds, objectives, and openness.

According to a press statement from HDFC, this is the largest social financing issuance in India, the largest social loan worldwide, the first social ECB loan to originate outside of India, and the largest ECB loan deal from a housing finance company or private NBFC in India.

The largest mortgage lender in the nation by asset size since its founding in 1977 has funded 9.5 million (95 lakh) housing units and has a gross loan book of Rs6.7 trillion.