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New Mexico Sells $120 Mln in Housing Bonds

By Munichain News Desk

The New Mexico Mortgage Finance Authority issued $120 million in bonds to finance affordable housing initiatives.

The authority sold the bonds in two series. The tax-exempt 2024 Series A bonds, consisting of $96 million, mature between 2025 and 2055, paying interest at rates between 3.2% and 5.75%. The federally taxable 2024 Series B bonds, consisting of $24 million, mature between 2025 and 2054, bearing interest at rates between 4.913% and 6.03%. The securities received a rating of Aaa from Moody’s Investors Service.

The bonds are collateralized by a pool of mortgage-backed securities purchased by the bond proceeds. Moody’s analysts wrote that the rating reflects the “high quality of the collateral.” 

The bond sale will fund mortgage loans to low-to-moderate income homebuyers in one of the poorest U.S. states. New Mexico had the third-highest poverty rate among U.S. states in 2021, according to the New Mexico Department of Workforce Solutions, which is part of the state government. The poverty rate of 18.4% trailed only Mississippi and Louisiana. It is likely that up to 20,000 New Mexicans are unhoused amid a shortage of affordable single-family homes and an uptick in evictions, according to a report by the nonprofit New Mexico Coalition to End Homelessness.

The New Mexico Mortgage Finance Authority provides affordable housing in the state, including through down payment assistance programs and rental assistance initiatives. Since its founding in 1975, the authority has helped almost half a million New Mexicans find quality affordable housing, according to its website. 

The bonds are limited obligations of the authority, payable by mortgage revenue.

RBC Capital Markets, LLC served as lead underwriter on the issuance, purchasing the bonds for $123.5 million. The price reflected a premium of $3.5 million. CSG Advisors acted as financial advisor.

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