56TP T.h.f.c.5.125%

    


T.H.F.C. (Social Housing Finance) Limited



COMM.800824.3
T.H.F.C. (Funding No.1) Plc
T.H.F.C. (Social Housing Finance) Limited
T.H.F.C. (Funding No.1) Plc 5.125% bonds due 2035/37              ISIN: XS0208677285
                                                                                                     Sedol: B054Q31
T.H.F.C. (Social Housing Finance) Limited
8.75% Debenture Stock due 2016/21                                 ISIN: GB0008765918
                                                                                                     Sedol: 0876591

The Housing Finance Corporation Limited ('THFC') a specialist, not-for-profit,
aggregating financial intermediary providing funding to registered social
landlords. Since inception, THFC and its subsidiaries have issued sterling
debentures with a nominal value of almost �1billion. This debt is secured by
loans to over 120 registered social landlord borrowers.

T.H.F.C. (Funding No. 1) Plc to issue further bonds

In December 2004 T.H.F.C. (Funding No. 1) Plc ('Funding 1') was established as
an issuing vehicle for 5.125% bonds due 2035/37. At the time THFC stated its
intention to issue additional debt securities via Funding 1 from time to time as
sufficient underlying borrower demand is achieved. The proceeds of such debt
securities were intended to be loaned to THFC in order for THFC to on-lend the
same to its registered social landlord borrowers.

Since the inaugural issue of bonds in December 2004, Funding 1 has undertaken
two further issues of bonds (in December 2006 and March 2007) for a number of
borrowers who wished to refinance existing THFC and third party loans as well as
borrow new money. We now have a number of further borrowers expressing interest
in borrowing in order to refinance existing loans from THFC and its subsidiaries
and third party loans as well as to borrow new money.

We are considering the refinancing of these borrower loans by the issue of up to
circa �40 million nominal amount of additional debt securities that will be
fungible with the original debt securities issued by Funding 1 in December 2004,
December 2006 and March 2007 (bonds with a fixed coupon of 5.125% due 2035/37).
A proportion of the issue proceeds would ultimately be used by the borrowers to
purchase existing bonds issued by THFC, its subsidiaries or third parties in
order to surrender these as repayment of existing loans. The remainder of the
issue proceeds would constitute additional lending by THFC to the borrowers.

The lead manager for the issue of additional securities by Funding 1 (if any)
will be ABN AMRO Bank N.V., London Branch ('ABN AMRO'), who will be contacting
investors with respect to subscribing for the new securities to be issued,
selling existing securities, or switching between the two.

T.H.F.C. (Social Housing Finance) to purchase own Debenture Stock in a private
transaction

T.H.F.C. (Social Housing Finance) ('SHF') is a subsidiary of THFC. SHF has been
approached by one of its borrowers who wishes to prepay a loan which was funded
by the issue of 8.75% Debenture Stock (the Stock). The borrower will not finance
the prepayment by borrowing from THFC via the issue of bonds by Funding 1
referred to above but from other sources. The borrower proposes to purchase
Stock in the market at the prevailing market price. The borrower will then
prepay their loan with SHF and at the same time SHF will purchase the Stock from
the borrower and cancel it. THFC and some of its subsidiaries have previously
facilitated transactions of this type for other borrowers.

Under the terms of the trust deed securing and constituting this Stock, SHF can
only allow a borrower to prepay its loan at the 'Adjusted Redemption Price'. SHF
proposes to purchase the Stock from the borrower at the same price, the Adjusted
Redemption Price, which will be higher than the prevailing market price.

THFC and its subsidiaries may be prepared to enter into similar transactions
with other borrowers but will only purchase Stock at the Adjusted Redemption
Price as part of an overall transaction which involves the prepayment of a loan
at the same price.

If you have any queries about these proposed transactions or would like an
update on the social housing sector generally, please do not hesitate to contact
the following representatives of THFC:

Piers Williamson Tel: +44 20 7337 9930 E: piers.williamson@thfcorp.com

Fenella Edge Tel: +44 207 337 9923 E: fenella.edge@thfcorp.com

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