The financing structures of social housing corporations: an examination of disclosure quality in the annual reports

This study examines the financing structures and the accompanying disclosures of social housing corporations. We found that in the period 2018-2021, the loans issued by the social housing corporations increased, while the overall interest costs decreased, leading to a lower cost of funding. In addition, we found that the social housing corporations favour fixed rate loans and the use of floating rate loans decreased. Most of these floating rate loans were hedged with derivatives, but the use of derivatives in general decreased with a significant amount. The disclosures related to the financing structures vary significantly in quality. The disclosures which can be improved relate to embedded derivatives, collateral requirements for derivatives, interest rate risk sensitivity analyses and the assumptions used for the fair value calculation.