16 March 2017
The Investment Association has today published Governance and Disclosure Guidelines, which set out investor expectations for housing associations seeking funding from capital markets. The Guidelines provide recommendations for issuers concerning financial reporting and governance practices at housing associations, including a description of the regulatory backdrop to these issues and an explanation as to why investors seek this information.
In recent years housing associations have increasingly turned to the debt capital markets for long-term funding, diversifying away from traditional bank lending. Since 2012 housing associations have raised over £14.4bn of debt in capital markets, to supplement £10.7bn raised through bank financing. The growing use of capital markets for funding looks set to continue, especially given the changing profile and funding needs of the sector and the favourable pricing and capital that institutional investors are able to provide.
Most of the information investors want will already be held within any housing association that has listed debt securities or is seeking funding in debt capital markets. The only shift that is needed is to ensure that this information is easily accessible and publicly available. Improved public disclosure from housing associations will be instrumental in ensuring investor confidence in the sector, thereby unlocking vital financing for housing.
The Investment Association and its members look forward to continuing to work in partnership with housing associations in the future, helping to meet the UK’s housing needs.