The Connecticut Housing Finance Authority issued $246.6 million in bonds to finance affordable housing initiatives.
The authority sold the bonds in two subseries. The tax-exempt Subseries C-1 bonds, consisting of $96.6 million, mature between 2025 and 2054, paying interest at rates between 3.35% and 6%. The federally taxable Subseries C-2 bonds, consisting of $150 million, also mature between 2025 and 2054, carrying interest at rates between 4.994% and 6.143%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The authority will use the bond proceeds to support its Housing Mortgage Finance Program, which seeks to provide housing for low- and moderate-income Connecticut residents. One way the authority does so is by buying pools of mortgages sold to those residents.
Moody’s analysts wrote that their rating reflects the program’s “high overcollateralization of assets to liabilities.” They cited the program’s asset to debt ratio of 133%, as well as state support, a high percentage of government-insured loans, and “very strong program cash flows.”
The bonds are general obligations of the authority, secured by its revenue and assets. The authority recorded $253.7 million in operating revenue last fiscal year, almost half of which came from interest on mortgages it owns.
RBC Capital Markets, LLC served as lead underwriter on the issuance, purchasing the bonds for $249 million. The price reflected a premium of $2.4 million. Caine Mitter & Associates Inc acted as financial advisor.