The Minnesota Housing Finance Agency issued $125 million in bonds to finance homebuying loans to low-and moderate-income Minnesotans.
The agency sold the residential housing finance bonds (RHFB) in three series. The tax-exempt 2024 Series A bonds, consisting of $31.4 million, mature on January 1, 2054, and pay interest at 6.25%. The taxable 2024 Series B bonds, consisting of $73.6 million, mature between 2025 and 2051, yielding between 4.718% and 5.96%. The taxable 2024 Series C bonds, consisting of $20 million, also mature on January 1, 2054, and bear interest at a weeky rate.
The Series A and B bonds received a rating of Aa1 from Moody’s Investors Service and AA+ from S&P Global Ratings. The Series C bonds received a rating of Aa1/VMIG 1 from Moody’s and AA+/A-1+ from S&P.
“The Aa1 rating assignment is based on the general obligation pledge of Minnesota Housing Finance Agency (Aa1 Stable), with further support from the pledged assets and positive financial performance of the RHFB indenture as well as the growing concentration of mortgage-backed securities within the Program,” Moody’s analysts wrote.
In recent years, the Minnesota Housing Finance Agency has become one of the largest issuers of bonds with a positive social impact. In 2022, the agency issued the third-most bonds carrying a positive impact designation, according to a report by S&P. The state of Massachusetts and the California Health Facilities Financing Authority were the first and second largest social bond issuers, according to the report.
The Minnesota Housing Finance Agency issues bonds to finance mortgages for low- and moderate-income homebuyers. The Series 2024 bonds are general obligations of the agency, payable out of any of its revenue or assets.
RBC Capital Markets, LLC served as lead underwriter on the issuance. CSG Advisors Incorporated acted as financial advisor.