Social Bond aimed at supporting social housing projects
Record numbers for CDP's first Social Housing Bond: over 270 investors participated in the transaction with demand exceeding 5 billion Euro, more than 6.5 times the final offer of 750 million Euro.
The bond is intended to support the development of social housing projects, with initiatives dedicated to the most vulnerable population groups, who do not have the requirements to access public housing, but are unable to meet market conditions for their housing needs due to economic constraints or the lack of a suitable offer.
The issuance reaffirms CDP's commitment to local development, in line with the strategy outlined in the 2019-2021 Business Plan. It reconfirms CDP's intention to expand the forms of funding dedicated to activities with a positive social and environmental impact, in line with the goals of United Nations 2030 Agenda.
In fact, this issuance is inspired by the goals 1 (Zero poverty) and 11 (Sustainable cities communities) of the United Nations Sustainable Development Goals (UN SDGs). CDP for the first time has reoriented its operating model towards sustainable development themes, thanks to the 2019-2021 Business Plan.
The social housing sector
Cassa Depositi e Prestiti has been committed to social housing for over a decade, supporting and integrating Government and local authority policies, participating with 1 billion Euro in the “Fondo Investimenti per l’Abitare” (FIA). This is managed by CDP Investimenti SGR (70% CDP ownership) and has a total capacity of approximately 2 billion Euro. In addition to these resources, funding of over 1 billion Euro has been committed by about 200 institutional investors including banking foundations, local authorities, institutional investors, cooperatives and private real estate companies, as part of the “Sistema Integrato di Fondi Immobiliari” (SIF).
The picture that emerges from Istat data on poverty describes a situation with 1.8 million families (7%) and 5 million individuals (8.4%) living in conditions of absolute poverty in addition to the over 3 million families (11.8%) and 9 million individuals (15%) who live in conditions of relative poverty.
A large number of families have significant housing difficulties, considering that 17% have difficulty paying their bills, rent or mortgage payments; 15% of families live in homes that are in poor conditions or are inadequately heated; almost 40% have difficulties when faced with unexpected expenses.
The most affected categories are young people, elderly, precarious workers, single-income families and immigrants, exposed to a high poverty risk due to the worsening of their financial conditions.
Although Italy is the European country with the highest real estate property levels, since 2012 the trend shows rentals replacing ownership. This is due to the prices of the real estate, which - although falling - still remains high on average also in light of families’ difficulties in accessing credit.
The incidence of renting is higher among people under 44 years old living in medium-large cities. For an increasing number of people, renting is becoming the only way to meet their housing needs.
The new CDP issuance will help to bridge this gap by offering residences at sustainable costs, supporting projects in favour of social housing, with a view to foster sustainable development.
The initiative is part of CDP's “Green, Social and Sustainability Bond Framework” and is in line with the Social Bond Principles published by the International Capital Market Association (ICMA).
Tenor 10 years
Nominal amount € 750 mln
Annual coupon 1.00%
CDP - Social Housing Bond Investor Presentation
Vigeo Eiris Second Party Opinion
CDP Green Social and Sustainability Bond Framework
CDP Social Housing Bond Deal Review
CDP Social Housing Bond Report
Methodology for estimating the impacts
ISS ESG External Review on CDP Social Housing Bond Report