The New Hampshire Health and Education Facilities Authority issued $70.64 million in bonds to finance student loans issued by a local nonprofit.
The authority sold the bonds in two series. The taxable Series 2023A bonds, consisting of $40.95 million, mature between 2033 and 2043, yielding between 6.566% and 7.135%. The tax-exempt Series 2023B bonds, consisting of $29.69 million, mature between 2026 and 2043, yielding between 4.49% and 5.22%. The securities received a preliminary rating of AA from S&P Global Ratings.
The authority will loan the bond proceeds to the New Hampshire Higher Education Loan Corporation (NHELC). In turn, the NHELC will finance and refinance student loans for students from New Hampshire or who are studying in New Hampshire.
The issuance comes soon after payments resumed on federal student loans after a three-year pandemic hiatus. President Joe Biden has made several efforts to cancel federal student debt; while these likely would not include private loans such as those made by NHELC, their resumption could pose a challenge for the corporation.
“If the borrowers of the Corporation’s Financed Eligible Loans experience financial hardship as they resume repayment of their Federal Direct Loan Program student loans, delinquency and default rates on the Corporation’s Financed Eligible Loans may increase, causing a decrease in cash flow available to make payments,” including on bonds that secure this week’s issuance, the official statement accompanying the sale of the bonds reads.
The bonds are special obligations of the authority, backed by private student loans coordinated by NHELC.
RBC Capital Markets, LLC served as underwriter on the issuance, purchasing the bonds for close to par.