Home Month and Year May 2021 HPC Housing Investment Corporation Completes Inaugural Social Bond Financing for New Construction...

HPC Housing Investment Corporation Completes Inaugural Social Bond Financing for New Construction Lending Program


HPC Housing Investment Corporation (HIC) is pleased to announce that it closed a C$40 million social bond offering as part of its new Construction Lending Program, that will provide long-term financing for an affordable housing project in Edmonton, Alberta.

First to benefit from this new lending program is Capital Region Housings (CRH) Londonderry mixed use redevelopment project. Located in central Edmonton, the redevelopment will replace the existing 80 units with new apartments and a townhome. The project features: 192 affordable units with the remainder set at market, 24 accessible (barrier-free) units and a 13 percent increase in energy efficiency, as compared to the previous structure.

CRH’s Londonderry mixed use redevelopment is Edmonton’s first affordable housing renewal project. The project will feature a mixed market rental scheme providing social, affordable and market rents, with approximately 80 per cent of the project’s homes provided as affordable housing. Once complete, Londonderry will be home to 240 households and feature a private courtyard, four tenant support community spaces and two commercial retail spaces. Construction on the redevelopment began in November of 2018 and is expected to be complete by March 2022. The City of Edmonton owns the land and has entered into a long-term lease of 60 years with the CRH and Alberta Social Housing Corporation (ASHC as co-owner). The prime consultant is GEC Architecture and the construction manager is Stuart Olson.

“We are invested in the success of our tenants and combined with $51.1 million in Government of Alberta funding, this innovative investment strategy partnership with the Housing Investment Corporation will help Edmontonians get better access to safe and affordable housing. The demand for affordable housing, whether it be social, mixed-income or near market, continues to increase – we have a priority list of 9,000 families looking for their first affordable home. As an organization, Capital Region Housing always looks for innovative ways to build, develop and provide housing for our customers,” says Greg Dewling, CEO, Capital Region Housing.

The financing for this project was secured by HIC through the private placement of Senior Unsecured Amortizing Social Notes, Series C with The Canada Life Assurance Company (Canada Life) being the sole investor. Financing consists of a blended construction and take-out loan with a term of 40.25 years. It features an interest-only period during construction (27 months) and a seamless transition to principal and interest payments for the balance of the term (assuming a 48 year amortization period) and a bullet payment due in June 2061.

The new Construction Lending Program adheres to HIC’s Social Financing Framework, which complies with the Social Bond Principles developed by the International Capital Markets Association in June 2020. HIC anticipates the new lending program will become a large component in the institution’s portfolio as affordable housing providers across Canada seek to develop new affordable housing.

“Despite the challenges our sector has faced with the global pandemic, we have continued to see providers working hard to advance new projects that support affordable housing in their communities. That’s why we are pleased to be making this innovative financing solution available. Our aim is to further remove barriers for Canadian social and affordable housing providers by allowing them to focus on getting new housing built, while controlling costs during construction and through the life of the project,” concludes Shayne Ramsay, Chair of HIC.