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Utah Sells $232 Mln in Housing Bonds

By Munichain News Desk
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The Utah Housing Corporation (UHC) issued $232.4 million in bonds to finance affordable housing initiatives.

The corporation sold the bonds in two series. The tax-exempt 2024 Series A bonds, consisting of $108.1 million, mature between 2025 and 2054, yielding between 3.45% and 6.5%. The taxable Series 2024 Series B bonds, consisting of $124.2 million, mature between 2025 and 2054, yielding between 5.21% and 6.25%. The securities received a rating of Aa2 from Moody’s Investors Service.

The bond proceeds will support the authority’s mortgage bond program and its portfolio of federally insured mortgage loans. The corporation also plans to buy federally-backed mortgage certificates.

“The Aa2 rating reflects the strong program asset-to-debt ratio (PADR) of the program and the increasing proportion of MBS in the loan portfolio following this issuance,” Moody’s analysts wrote, referring to mortgage-backed securities.

The bond sale comes amid a flurry of UHC activity aimed at bolstering affordable housing in Utah. Soon after the issuance, UHC announced that its board had approved $20 million in tax credits that will create 1,500 units of affordable housing, according to a press release. The units will be located in eight countries across Utah, including urban, suburban, and rural areas.

The corporation will also use the proceeds to finance down payment, closing cost, and interest rate buy down assistance. 

Despite the efforts of state agencies, Utah officials acknowledge the need for more efforts to drive down a high cost of living that has made affordable housing scarce. Researchers at the University of Utah anticipate a shortage of more than 37,000 units next year.

The bonds are special, limited obligations of the corporation, secured by mortgage revenue and other funds.

Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for $236.7 million. The price reflected a premium of more than $4 million.


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