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.
