THFC: WHAT WE CAN DO FOR INVESTORS THFC is the foremost aggregating funder to the HA sector. Founded in 1987 through a joint initiative of the Housing Corporation and the National Housing Federation, THFC has a close long-term relationship with the sector. THFC is an I &P and its nine-strong board has a wealth of experience from the banking, financial and commercial sectors. It also includes representation from the TSA and National Housing Federation, which helps keep THFC focussed on the needs and risks of the HA sector. THFC’s A+/A-1 rating was re-affirmed in December 2009. THFC acts as principal and borrows in its own name. It on-lends immediately and only to registered providers. Funds borrowed are on-lent on similar interest and repayment terms thus ensuring that THFC is protected against interest rate risk. THFC does not take foreign currency risk. We always make our own credit assessment of potential borrowers. Our loans are fully secured and we are legally bound to conservatively set covenants. Investors to THFC benefit from a floating charge over THFC’s assets; primarily our secured loans to HAs and our reserves. All THFC stocks and loans rank pari passu and are further protected by a negative pledge. THFC covenants to investors that its operating expenditure will remain within total income on a rolling three year basis. THFC takes out a combination of fixed and floating charges in respect of loans. Asset cover requirements are underpinned by a conservative valuation methodology. This is an extract from a specially commissioned paper ‘Investing in Social Housing, a guide to the development of the affordable housing sector’ written for THFC by Andrew Heywood. A full copy of the paper can be downloaded here.