June 03, 2010
South Carolina State Housing Finance and Development Authority
[Columbia, SC] The South Carolina State Housing Finance and Development Authority (SC State Housing) expects to sell $100 million in mortgage revenue bonds this month under the US Treasury Department’s New Issue Bond Program (NIBP). Pricing and sale will take place June 7-8, 2010. The issue includes $60 million in tax exempt bonds SC State Housing will convert from short-term taxable debt bought by the Treasury last December and $40 million tax exempt bonds the agency is required to issue to match the federal purchase.
SC State Housing is among the first housing finance agencies that escrowed proceeds from the sale of bonds to Treasury through Fannie Mae and Freddie Mac under the NIBP. Now the agency can roll out a piece of its escrowed amount to raise funds for its popular first-time home buyer program.
The 2010 Series A single-family housing bonds will be sold to retail investors on Monday and institutional investors on Tuesday. The bonds are rated “Aaa” by Moody’s Investors Service. McNair Law Firm is bond counsel.
The Treasury initiated the NIBP last November to buy and help create a market for state and local housing finance agency debt. Under the program, the Treasury bought Fannie Mae and Freddie Mac securities backed by housing finance agency (HFA) bonds, after allocating bond capacity to each agency that wanted to participate. SC State Housing was one of the first HFAs in the country to respond, according to SC State Housing’s Executive Director Valarie M. Williams.
“Affordable housing always drives economic growth,” she said. “We’re proud at SC State Housing that we have an aggressive record of raising funds through the sale of bonds, which in turn helps stimulate the economy by helping small businesses and creating jobs in the subsidiary arenas associated with affordable housing.”
Although the NIBP program expired on December 31, 2009, Treasury allowed HFAs to issue short-term variable-rate bonds before the end of the year. These bonds can now be converted into long-term fixed-rate issues. Agencies participating in the NIBP must sell to the public 40% of the aggregate bonds they sold to the Treasury, Williams said, expressing hopes that South Carolina investors will participate.
“It’s good to be able to raise money from out-of-state investors to fund SC programs,” Williams said, “but we enjoy knowing that we’re providing a solid investment opportunity for South Carolinians as well.”
SC State Housing is a self-sustaining agency of state government and does not receive a state appropriation. For more information on SC State Housing programs or initiatives, visit the agency’s website: www.schousing.com.