CHFA Bond Sale Oversubscribed

-

Sale was accelerated due to $266 million deman

Rocky Hill, Conn. – July 27, 2015 – (RealEstateRama) — The Connecticut Housing Finance Authority (CHFA) successfully sold $116 million of the 2015 Subseries C-1 and C-2 fixed-rate bonds on Wednesday, July 22. CHFA received over $266 million of orders for the bonds, proceeds from the sale of the bonds will be used to finance the Authority’s single-family mortgage program. The remaining $45 million in variable-rate bonds, for a total issue of $161 million in bonds, will be sold by the August 6, 2015 closing.

“This is a clear recognition of CHFA’s creditworthiness, and our mission to alleviate the shortage of affordable housing in Connecticut,” said Norbert Deslauriers, Interim Executive Vice President. CHFA has sold about $345 million in bonds to support its housing programs in 2015.

Initially, CHFA planned to conduct a two-day sale. However, the oversubscription created an opportunity to accelerate the sale, eliminating a potential market risk. Due to high demand, CHFA was able to reduce the coupon of various maturities by 5 and 10 basis points. This strategy in turn provides the opportunity for CHFA to offer below-market interest rates to its borrowers. The current below-market interest rates on CHFA mortgages for first-time homebuyers range from 3.25 percent to 3.50 percent. According to a Freddie Mac survey on July 23, the average national interest rate is 4.04 percent.

As a quasi-public self-funded agency, CHFA’s bond program is an important tool for housing finance in the state. In addition to single-family mortgages, bond proceeds are used to finance affordable multifamily rental housing developments, which in turn generate jobs, tax revenue and economic activity in the state.

CHFA maintains a AAA rating with Standard & Poor’s and a Aaa rating with Moody’s Investor Services, allowing the Authority to achieve the lowest cost of funds. Citi is the Lead Senior Manager for the fixed-rate offering and RBC Capital Markets is the Senior Manager for the variable-rate offering.

SHARE
Avatar

Connecticut RealEstateRama is an Internet based Real Estate News and Press Release distributor chanel of RealEstateRama for Connecticut Real Estate publishing community.

RealEstateRama staff editor manage to selection and verify the real estate news for State of Connecticut.

Contact:

Previous articleConnecticut Voters Express Strong Support for More Federal Funding to Increase Affordable Housing to Address Homelessness
Next articleAt Home for Homeless Veterans, Blumenthal to Announce New Bill To Combat Veteran Homelessness