A Maryland state authority issued $300 million in bonds to finance affordable housing in the state.
The Community Development Administration at Maryland’s Department of Housing and Community Development sold the bonds in two series. The tax-exempt 2023 Series C bonds, consisting of $115 million, mature between 2024 and 2054, yielding between 3.25% and 5.75%. The taxable 2023 Series D bonds, consisting of $185 million, mature between 2024 and 2053, yielding between 4.982% and 6%. The securities received a rating of AA+ from Fitch Ratings and Aa1 from Moody’s Investors Service.
“The RRB program has demonstrated strong asset parity, even when Fitch stress scenarios are assumed,” Fitch analysts wrote, referring to residential revenue bonds. The bonds issued this week will be backed by revenue from a pool of loans that the administration will purchase with the proceeds from the sale of the bonds.
The bond issuance follows several local and federal measures to raise money for affordable housing in Maryland. In March, Governor Wes Moore announced a $13.4 million commitment from the state to support projects that create or preserve affordable rental housing. That same month, Maryland’s congressional delegation announced $1.5 million in federal initiatives that included affordable housing creation and preservation in the state. And in May, the U.S. Department of Housing and Urban Development allocated $5.4 million to help Maryland increase and preserve its stock of affordable housing.
The bonds are special obligations of the Community Development Administration, secured by its revenue.
RBC Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for par.