The Kentucky State Property and Buildings Commission has recently authorized a substantial bond issuance aimed at bolstering housing and educational opportunities. Among the approvals was a $400 million single-family mortgage revenue bond request by the Kentucky Housing Corp. (KHC). Additionally, the commission permitted the Kentucky Higher Education Student Loan Corporation to issue up to $339.38 million in bonds. These measures aim to provide financial support for first-time homebuyers with moderate incomes and students seeking affordable education loans. The KHC expects to achieve a net interest rate of 5.492% over a 30-year period on its upcoming bond sale. Furthermore, other entities such as the University of Louisville and the Kentucky Economic Development Finance Authority received approval for various types of bonds totaling hundreds of millions.
On Thursday, the Kentucky State Property and Buildings Commission granted authority for up to $860 million in bonds. This decision includes issuing $400 million in single-family mortgage revenue bonds by the Kentucky Housing Corp., with $150 million scheduled for pricing on May 7. Bank of America (BofA) will serve as the senior manager for this transaction. According to Billy Aldridge from the Kentucky Office of Financial Management, these bonds aim to facilitate housing financing options specifically targeting first-time low- and moderate-income homebuyers. A significant portion of the funds will be divided evenly between tax-exempt and taxable portions.
Tracy Thurston, Chief Financial Officer of the Kentucky Housing Corp., explained that this marks the corporation's largest bond sale since 2013. In recent years, due to historically low interest rates, the organization primarily financed mortgages through packaging them into mortgage-backed securities traded in the secondary market. However, rising interest rates over the past year and a half prompted a shift towards utilizing mortgage revenue bonds while maintaining some involvement in secondary trading activities.
In related developments, the commission also approved an issuance of up to $110 million in bonds by the Kentucky Higher Education Student Loan Corporation. Program Analyst Kaitlin Craigmyle reported that BofA will price these bonds on May 13, anticipating a true interest cost of approximately 5.4% over a 20-year span. Although specific details regarding timing, size, and structure remain undetermined, the initiative aims to enhance access to affordable student loans.
Other notable approvals include up to $45 million variable rate demand bonds requested by the Kentucky Economic Development Finance Authority, $40 million general receipts bonds for the University of Louisville, and $35 million project notes associated with the Federal Highway Trust Fund First Refunding Series. Collectively, these actions underscore the state's commitment to fostering economic growth and improving living standards across Kentucky.
