Urban Ubomi 1 RF Limited, a mortgage-backed securities programme administered by TUHF Limited and developed with the assistance of arrangers Standard Bank, has won the Local Currency Bank/FI Bond Deal of the Year award in the 2022 GFC Media Group’s Bonds, Loans and Sukuk Africa Awards.
For TUHF, a residential property financier specialising in inner-city rental property, this recognition in a category where it saw competition from the likes of RMB and Nedbank, is significant.
Raising funds through securitisation is how TUHF plans to grow the organisation and its funding base. The social bond issuance under Urban Ubomi 1 in March 2021, enabled it to raise R609 million. These proceeds were used to acquire a pool of Loan Agreements originated by TUHF Limited. 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.
“Winning the Local Currency Bond /FI Bond Deal of the year accolade bodes well for our investors’ confidence in TUHF and continues to build our credibility in this area. 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,” said Ilona Roodt, Chief Financial Officer at TUHF.
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 that, with its associated structured finance vehicles, allows TUHF to issue green, social and sustainable bonds that support its lending to qualifying projects.
According to Roodt, 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,” said Roodt. “And TUHF will continue to develop its impact in the environmental and green space, considering specifically the use of green bonds to finance building renovation or construction employs renewable energy products and principles whilst ensuring energy efficient and energy saving modalities are adopted.”
GFC Media Group is a market-leading Corporate Finance and Investment Banking events business for Emerging and Frontier Markets. The Group has a substantial network of business partners and counterparties around the world, and it delivers conferences, roundtable events, briefing days and awards annually to 5000 participants. The selection process followed by GFC in respect of the Local Currency Bond/Deal of the year award involved close examination of deal size, tenor, structure, and distribution. Furthermore, judges conducted analysis on the background of the issuer and their access to finance, with extra credit for those deals demonstrating high quality execution, contribution to the sector, accessing new pools of liquidity, innovative structuring, and opening-up new markets.
Additionally, following the success of the initial note issuance (Urban Ubomi 1), TUHF approached the market for a further issuance under the R2.5 billion programme in February 2022 and an additional R440 million was issued, following a successful auction. 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,” said Roodt.
“TUHF’s business is greatly aligned with Standard Bank’s key focus on driving sustainable growth and value by providing societies with services and solutions that achieve inclusive growth and prosperity, and community well-being and upliftment. We are extremely proud of this partnership, the successes we’ve shared and the well-deserved accolade. Most of all, we’re proud of the role we’re playing in transforming South Africa’s inner-cities through enabling the development of quality affordable housing and expanding economic opportunities,” says Nicholas Gunning, Senior Manager in Standard Bank’s Debt Capital Markets Team.
Photo: (Left to right) Paul Jackson, CEO, TUHF; Tebogo Moseamedi, Treasury Specialist, TUHF; Ilona Roodt, CFO, TUHF; AJ Rothman, Consulting Capital Markets Specialist.