Guaranteed housing corporation loans are a relatively unknown, yet rapidly growing category within the Dutch fixed income market. They combine a solid risk profile with a direct societal contribution to the Dutch housing market.
Commissioned by the Dutch Social Housing Guarantee Fund (Waarborgfonds Sociale Woningbouw, WSW), AF Advisors conducted research into the structure, characteristics and positioning of these loans within institutional portfolios. The financing is used for the construction, renovation and sustainability improvements of social housing, thereby directly contributing to affordable housing and the energy transition in the Netherlands.
The whitepaper explains how WSW’s unique guarantee structure results in an AAA credit profile, while investors simultaneously benefit from a spread over Dutch government bonds. In addition, the paper explores the role of guaranteed housing corporation loans within ALM strategies, their attractiveness for pension funds, insurers and banks, and their contribution to ESG and impact objectives.
The paper also discusses the expected growth in financing needs of housing corporations in the coming years, partly driven by the Dutch National Performance Agreements related to new construction and sustainability improvements. As a result, the relevance of this market for institutional investors is expected to increase further.
The whitepaper was prepared by AF Advisors on behalf of WSW.
