Kentucky commission authorizes up to $860 million of bonds
by 
Bloomberg News
The Kentucky State Property and Buildings Commission authorized up to $860 million in bonds Thursday.
The commission approved the Kentucky Housing Corp.’s request for $400 million in single-family mortgage revenue bonds with $150 million to be priced on May 7, with BofA serving as senior manager. The commission also authorized the Kentucky Higher Education Student Loan Corp. to issue up to $339.38 million in bonds with the first series to be $110 million.
The KHC bond will be issued to provide housing financing for first-time
KHC anticipates a net interest rate of 5.492% for a term of 30 years on the $150 million limited obligation bond sale, anticipated to be split evenly between tax-exempt and taxable portions, Aldridge said.
Tracy Thurston, chief financial officer for KHC, told commission members that this was the corporation’s first large bond sale since 2013. Since then, with low interest rates, KHC has financed mortgages by packaging them as mortgage-backed securities in the secondary market up until a year and a half ago when interest rates started going up. KHC then switched to using mortgage revenue bonds to finance its activity while continuing doing some secondary market trading, she said.
Office of Financial Management Program Analyst Kaitlin Craigmyle told the commission BofA will price for the higher ed corporation $110 million bonds on May 13 and Craigmyle anticipates a true interest cost of 5.4% over 20 years. However, she also said the timing, size and structure of the transaction are “yet to be determined.”
Additionally, the commission approved the Kentucky Economic Development Finance Authority’s request for up to $45 million variable rate demand bonds, the University of Louisville for up to $40 million general receipts bonds and $35 million Kentucky Asset/Liability Commission Federal Highway Trust Fund First refunding series project notes.
