Bond Issuing Cooperative for Limited Profit Housing – Switzerland
The Bond Issuing Cooperative for Limited Profit Housing (Emissionszentrale für gemeinnütziger Wohnbauträger/ Centrale d’émission pour la construction de logements – EGW/CCL) was jointly established in Switzerland in 1991 by the Government and the non-profit cooperative housing movement.
Its purpose is to raise cheap finance for non-profit housing construction. This is done by issuing bonds in the name of the EGW/CCL and distributing these funds among affordable housing providers.
Actors involved
Emissionszentrale für gemeinnütziger Wohnbauträger/ Centrale d’émission pour la construction de logements – EGW/CCL
Scale
National
More information
The bonds issued by the EWG/CCL are generally 6-15-year fixed bonds, covered by mortgages on the title of the financed dwelling and by a government guarantee. Thanks to a careful credit assessment and ongoing monitoring of loan repayments, the default rate is close to zero. These arrangements enable the EWG/CCL to raise finance at particularly low interest rates, which are only marginally higher than the interest rates on Swiss government bonds. Since it was founded, the EGW/CCL has carried out 87 debt issuances with a total volume raised of CHF 7.1 billion (EUR 6.4 billion as of April 2020).
EGW/CCL is organized as a cooperative. Its members are housing cooperatives and other non-profit property developers. There are about 400 individual cooperative members of the EGW/CCL of which approximately 75 per cent have benefited from its loans.
EGW/CCL has been successful in reducing the costs of finance for non-profit housing providers and thereby helped to stabilize rents in the sector, which are linked to financing costs. It also enables small affordable-housing providers access to capital markets and offers risk-free assets for investors. Consequently, it enjoys strong political support.[1]
[1] Peter Gurtner, “The case of Switzerland”, paper presented at the UNECE Workshop on the Future of Social Housing, Geneva, 4-5 February 2014. Available at https://unece.org/fileadmin/DAM/hlm/prgm/hmm/social%20housing/2014_geneva/1.09.gurtner.pdf.
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