TUHF and Standard Bank social bond wins 2022 Deal of the Year award

CFO Ilona Roodt says the award bodes well for investors’ confidence in TUHF and builds its credibility.

TUHF and Standard Bank’s mortgage-backed security programme Urban Ubomi 1 has won the Local Currency Bank/F1 Bond Deal of the Year award in the 2022 GFC Media Group’s Bonds, Loans and Sukuk Africa Awards.

“Winning the Local Currency Bank/F1 Bond Deal of the year accolade bodes well for our investors’ confidence in TUHF and continues to build our credibility in this area,” says TUHF CFO Ilona Roodt. “Partnering with Standard Bank has been key to our ability to steer the organisation through the events of the past two years and to continue to raise funding going forward.”

TUHF plans to grow the organisation and its funding base by raising funds through securitisation. The social bond issuance under Urban Ubomi 1 in 2021 March enabled it to raise R609 million. These proceeds were used to acquire a pool of loan agreements originated by TUHF. The loan agreements are extended to small and medium sized enterprises and entrepreneurs to fund predominantly residential property investments in the inner cities of South Africa.

Urban Ubomi 1’s social bonds were listed on the JSE’s Sustainability Segment of the Interest Rate Market, and the initial issuance coincided with the launch of TUHF’s Sustainable Bond Framework which, with its associated structured finance vehicles, allows TUHF to issue green, social and sustainable bonds that support its lending to qualifying projects.

Ilona adds that all the funds raised through the Urban Ubomi 1 bonds were used for client loans and have already been deployed on a use of proceeds basis under the social elements captured in TUHF’s Sustainable Bond Framework.

“Within this framework, local and international investors can help address social and sustainability issues through responsible finance. The lending we provide as an organisation focuses on social issues recognised under the Sustainable Bond Framework like affordable housing; empowering previously disadvantaged individuals based on Broad-Based Black Economic Empowerment principles; and increasing access to finance that promotes growth of micro and SMME businesses in the country,” she explains. “TUHF will continue to develop its impact in the environment and green space, considering specifically the use of green bonds to finance building renovation or construction employing renewable energy products and principles whilst ensuring energy efficient and energy saving modalities are adopted.”

Following the success of the initial note issuance, TUHF approached the market for a further issuance under the R2.5 billion programme in February 2022 and an additional R440 million was issued. The proceeds of the new notes were used to acquire additional qualifying loan agreements. “We are very pleased with the outcome given that total bids received amounted to R601 million and two new investors participated in the structure,” Ilona says.