The Connecticut Housing Finance Authority plans its fourth issuance of the calendar year, a $158 million sale of housing mortgage finance program bonds.
Tuesday's one-day retail period will precede the institutional sale, according to Hazim Taib, the authority's vice president for finance. Taib added that the agency might move up the timetable if the sale is oversubscribed. Its $123 million sale in August of tax-exempt bonds was oversubscribed and generated more than $400 million in orders on one day.
Morgan Stanley is lead manager.
New-money subseries D-1, for $96 million, will fund nearly 600 mortgages for first-time homebuyers. Subseries D-2, for $62 million, will refund some debt.
The agency intends to sell two series of multifamily housing bonds in November.
Taib said CHFA has sold $300 million of bonds this year, both single family and multifamily. The agency through Aug. 31 has funded 1,370 first-time homebuyer loans or $225 million, up 37% from the same period a year earlier. Statewide home sales are down 1.2% for that period, according to the Warren Group real estate data firm.
Moody's Investors Service and Standard & Poor's both assign triple-A ratings and stable outlooks.
"Part of it has to do with management. We have a very supportive board that enables us to craft new ideas," said Taib. "I have to give kudos to the rating agencies. That helps us access the market better."
S&P cited the Rocky Hill-based agency's strong oversight.
"[These] bonds benefit from, in our view, a solidly performing and low-risk loan portfolio, ample reserves, high-quality investments and a pattern of increasing asset-to-liability parity," analysts wrote.
Connecticut lawmakers created the agency in 1969 as a self-supporting, quasi-public housing agency charged with expanding affordable housing opportunities for low- and moderate-income persons statewide. To date, the combined mortgage financing for CHFA's single-family and multifamily housing programs exceeds $11 billion, the agency said.
Its 16-member board of directors meets monthly.
Moody's said strengths include a $2.6 billion single-family loan pool diversified throughout the state, consisting of $2 billon whole loans and about $530 million of loans securitized with Government National Mortgage Association and Federal National Mortgage Association backing; strong loan insurance coverage and bonds backed by the general obligation of the issuer and the state-provided Housing Mortgage Capital Reserve Fund.
According to Moody's, roughly 18% of the portfolio securing the bonds consists of multifamily loans — most uninsured — which poses a challenge.
Lamont Financial Services Corp. is financial advisor. Hawkins Delafield & Wood LLP, Edwards Wildman LLP and Hardwick Law Firm LLC are co-bond counsel. Kutak Rock LLP is representing the underwriters.