The city of Charlotte, North Carolina, sold $75 million in bonds to create affordable housing.
The bonds, which are taxable, mature between 2024 and 2043, yielding between 4.394% and 5.39%. They received a rating of Aaa from Moody’s Investors Service, AAA from Fitch Ratings, and AAA from S&P Global Ratings.
Charlotte’s rating reflects “a long history of favorable financial operations and a combination of budget control and reserve cushion that leaves it exceptionally well-positioned to address economic cyclicality and unforeseen budgetary challenges or emergencies,” according to Fitch.
The issuance comes as the housing market in Charlotte continues to surge, leaving many potential homebuyers priced out of purchasing property. The annual income necessary to afford a median Charlotte home increased from less than $80,000 in 2020 to almost $137,000 last year, according to a 2022 report by the University of North Carolina at Charlotte.
This week’s bond issuance will finance the development of housing for moderate- and low-income residents of the city. It is the latest in bond-funded investments in affordable housing in Charlotte, which has authorized $180 million in such spending since 2018. That year, the city created a fund to encourage investment in affordable housing; over the past five years, Charlotte has added 12,000 affordable housing units and shelter beds through financing from the fund, according to the official statement accompanying the sale of the bonds.
Charlotte is the biggest city in North Carolina and the second-biggest city in the southeast United States. The city has grown 30% over the past decade, anchored by its role as the financial hub of the region. Charlotte is the headquarters of banks including Bank of America and Truist, and it hosts 30,000 Wells Fargo Bank employees.
Wells Fargo Bank served as underwriter on the issuance.