MUFG Bank has announced the completion of a US$1.1 billion syndicated social loan facility for HDFC, one of India’s leading housing finance providers.
The Japanese bank is one of the mandated lead arrangers and bookrunners for the deal, which also marks its first social loan in India.
As the lead social loan coordinator, MUFG worked with HDFC on publishing its Social Financing Framework, underpinning the current deal and any other similar transactions that HDFC may choose to undertake in the future.
The framework is in line with the LMA-APLMA-LSTA Social Loan Principles 2021, a globally recognized methodology designed for participants in the sustainability financing market to consistently certify, track and monitor the social impact of financing assets. The annual reporting for the allocation of social loan proceeds will also be in line with Reserve Bank of India (RBI) guidelines.
Proceeds from the social loan will be used to finance affordable housing loans. Since its inception in 1977, HDFC has financed 9.5 million housing units and has a gross loan book of 6.7 trillion rupees (US$84.1 billion). HDFC has been considered a role model for housing finance for countries with nascent mortgage markets.
Colin Chen, MUFG’s head of ESG finance for Asia-Pacific, says: “This is a tremendous milestone for MUFG in India. We have long established ourselves as a leading player in the country’s renewables and clean energy sectors, but this social loan further demonstrates our ability to tailor ESG solutions across different industries to effect meaningful change.”
In line with its sustainability mission, MUFG has publicly committed to investing a cumulative total of 35 trillion yen (US$259 billion) into sustainability-related financing globally by 2030, of which close to 30% of this target, or 10.4 trillion yen, has already been achieved (fiscal year 2019 to 2021).
In May 2021, MUFG announced its commitment to achieve net-zero emissions in its finance portfolio by 2050 and its own operations by 2030.
In line with its sustainability mission, the bank has publicly committed to investing a cumulative total of 35 trillion yen (US$259 billion) into sustainability-related financing globally by 2030, of which close to 30% of this target, or 10.4 trillion yen, has already been achieved (fiscal year 2019 to 2021).