The New York State Housing Finance Agency sold $309.9 million in bonds to finance affordable housing initiatives.
The bonds mature between 2025 and 2063, paying interest at rates between 3.25% and 4.8%. The issuance includes some $228.4 million in term bonds maturing in 2063, with mandatory tender dates in 2026 and 2027. The securities received a rating of Aa2 from Moody’s Investors Service.
The agency will use the bond proceeds to support its affordable housing program, which includes financing mortgage loans for the construction and acquisition of multifamily rental housing.
Moody’s analysts wrote that their rating reflects their expectation that the program “will maintain overall high credit quality.”
The issuance comes at a dire moment for housing availability in New York, where the housing shortage in the state’s biggest city is at its most severe point in 50 years. Recent surveys conducted by the New York City government have indicated that there are no apartments available to rent below the city’s median rental price.
The state is making some efforts to address that shortage. In April, Governor Kathy Hochul negotiated a deal with the state legislature to increase the supply of affordable housing. But the deal faced pushback from critics in both the real estate industry and tenants rights groups, neither of whom is confident in its long-term promise.
For its part, the New York State Housing Finance Agency has issued bonds to finance low- and moderate-income rental housing since 1960. The 2024 bonds are special revenue obligations of the agency, payable primarily by mortgage loans.
Morgan Stanley & Co LLC served as lead underwriter on the issuance, purchasing the bonds for par. Caine Mitter & Associates Inc acted as financial advisor.