Mortgage lender HDFC announced the completion of a $1.1 billion syndicated social loan facility, to finance affordable housing in India. The lender calls it the world’s largest social loan. Social loans are especially curated by conglomerates like HDFC to finance projects that work towards a social cause or inspire a positive change across a sector.
The loan has been priced at a margin of 90 bps over SOFR (Secured Overnight Financing Rate), HDFC said in a statement. Proceeds from the social loan would go towards financing affordable housing loans.
Since its inception in 1977, HDFC has financed 9.5 million housing units and has a gross loan book of ?6.7 trillion, HDFC added. “Affordable housing links to nearly 300 industries. A boost to affordable housing will play a significant role towards the government’s ‘Housing for All’ objective. The aspiration to own a home is inherent in every household,” Deepak Parekh, Chairman, HDFC Ltd, said in a statement.
HDFC’s Social Financing Framework is designed for participants in the sustainability financing market to consistently certify and monitor the social impact of financing assets. The HDFC social loan claims to have many other firsts to its credit – it’s India’s largest social financing issuance, it’s the first social ECB loan out of India and the largest ECB loan deal from a housing finance company/ private NBFC in India.
MUFG Bank is the lead social loan coordinator and a mandated lead arranger and borrowers (MLAB) for this deal. CTBC Bank Co. Ltd, Mizuho Bank Ltd, State Bank of India and Sumitomo Mitsui Banking Corp. are the other MLABs and joint social loan coordinators.
“In India, housing will play an important role as a catalyst for growth. Combined with India’s growth prospects, I have never been as optimistic about the affordable housing sector as I am today,” Parekh added.
