UK: Funding for Housing and ZeroWatt Homes have signed an MoU to issue GBP500 million (US$576.58 million)-worth of government-backed Shariah compliant notes to provide off-balance sheet funding for local authorities to provide social housing, a LinkedIn post confirmed.
Funding for Housing is a not-for-profit social housing funding platform while ZeroWatt Homes is a modular sustainable social housing manufacturer. Under the MoU, 80% of the proceeds will be used to construct new social housing stock.
The facility will provide up to 30-year amortizing bonds at a rate of the benchmark rate plus 200–300bps plus UK consumer price index which will be capped at 5% per annum, with semi-annual distributions after the first year.
Depending on investor demand, the issuance may increase to GBP1 billion (US$1.15 billion) within 12 months through two further tranches.
The issuance platform Al Waseelah is supporting the notes issue while Yasaar is the Shariah compliance consultancy firm for the issuer.