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Netherlands: additional steps for social impact investment

Two Affordable Housing Bonds launched by NWB Bank

The Hague, 2 June 2017 | Published in Economy

On Wednesday, 31 May 2017, the NWB Bank (Nederlandse Waterschapsbank N.V.), rated Aaa/AAA, opted for a dual tranche transaction. The issuer launched a 7-year EUR 1.5 billion and a 15-year EUR 500 million inaugural Affordable Housing Bond for lending to Social Housing Organizations in The Netherlands according to NWB Bank’s affordable housing bond framework.

In the Netherlands, there has been successful implementation of social integration through a well-established infrastructure of large stocks of affordable housing for different income groups, providing affordable high quality living for lower income groups of the society. NWB Bank, as a public lending institute, is a large lender to the Dutch social housing organizations (SHO). With an ambition to raise further awareness around the Dutch social housing system and initiate further investor interest for social housing in general, NWB Bank issued an Affordable Housing Bond to finance the lending to social housing. The Dutch system, apart from securing housing for those in need, also targets a larger group of tenants, like youth and older people, who are facing challenges to find affordable living.

Given the fact that this is the inaugural affordable housing bond, NWB Bank announced on May 10, 2017 their intention to hold a series of investors meetings. During a roadshow in the Netherlands and France in combination with a range of calls with (international) investors, NWB Bank introduced their Affordable Housing framework.

Sébastien Garnier, responsible for European affairs at Aedes, the Dutch federation of social housing organizations commented:

 “For social housing providers the access to adequate financial means is crucial to sustain the needed investments in affordable housing for those people that need it most. Their investments and their social involvement in communities are beneficial for society. The fact that investors in this new affordable housing bond recognize this and value the social impact is an important step to bring financial means and society’s needs closer together.”

This development is another proof that it is worth keep working on social impact measurement tools as it is already happening in countries like France by Delphis. Although the amount of money is not extraordinary for the Dutch social housing sector standards it is a clear indicator that social impact investment may be an emerging opportunity for other countries in greater need to attract funds for housing.