Second-Party Opinion Download

Sustainalytics is of the opinion that the MORhomes Sustainable Bond Framework is credible and impactful and aligns with the Sustainability Bond Guidelines 2018. This assessment is based on the following:

USE OF PROCEEDS

The eligible categories for the use of proceeds – Affordable Housing and Green Buildings – are aligned with those recognized by both the Green Bond Principles and Social Bond Principles. Sustainalytics considers that the eligible categories will lead to positive environmental or social impacts and advance the UN Sustainable Development Goals, specifically SDG 11.

PROJECT EVALUATION/SELECTION

MORhomes’ internal process for evaluation and selecting eligible projects is managed by the Socially Responsible Investment Committee (SRIC), which is comprised by four members of the Board. The Housing Associations financed by bonds proceeds will be responsible for implementation of the financed projects. The SRIC ensures that Housing Associations comply with the Framework criteria. Sustainalytics considers this process to be in line with market practice.

MANAGEMENT OF PROCEEDS

MORhomes’ social and sustainability bond proceeds will be immediately lent to eligible Housing Associations and will be tracked using the associated loan documentation. Net proceeds will be applied on a ‘back-to-back’ basis by the paying agent to a series of identified loans arranged in connection with Housing Association social/affordable housing projects. Loans to Housing Associations will be agreed simultaneously with the issue of the bond. The loan amount will be equal to or slightly larger than the bond issued, and the loan term will equal the bond term. Therefore, the process will not include any temporary administration of the proceeds. Sustainalytics views this practice aligned with market standards.

REPORTING

MORhomes is committed to report on the allocation of proceeds on its website, on an annual basis, until full allocation. The allocation reporting will include details such as a complete list of Housing Associations financed, and an assertion by management that the net proceeds were allocated to eligible Housing Associations. Regarding impact, MORhomes will report, based on sample data provided by borrowers, the number of housing units constructed/refurbished/environmental standards achieved, overall indications of projects, and example case studies where suitable information is available. Based on these elements, Sustainalytics considers this process to be in line with market practice.