BRADENTON, Fla. - The Florida Housing Finance Corp. expects to sell $100 million of mortgage revenue bonds this week after stepping up efforts to attract investors in a difficult market.
Bond proceeds will finance or acquire mortgage-backed securities of loans made to low, moderate, or middle income homebuyers. The principal and interest of the securities will be guaranteed by Ginnie Mae, Fannie Mae, or Freddie Mac.
The 2008 Series 4 bonds will be sold in a retail order period Wednesday while institutional pricing will be on Thursday.
The deal, not subject to the alternative minimum tax, is expected to be structured as $28 million in serial bonds maturing from 2010 to 2023, and $72 million in term bonds of $17.1 million maturing in 2028, $23.2 million maturing in 2033, and $31.6 million maturing in 2038.
Because it's a tough market for housing bonds, the state agency has taken two new approaches to lure as many new investors as possible, particularly from the retail side, said Barb Goltz, the housing corporation's chief financial officer.
For the first time, the entire transaction will be available to retail investors.
The agency also has opened a special section on its Web site at www.floridahousing.org called "Support Florida Communities Buy Florida Housing Bonds," which leads people to a sales memorandum and a link to the preliminary official statement.
"That is another opportunity ... for both our brokers and investors to learn more about this bond issue because the financial markets and the bond markets are very difficult right now for housing," Goltz said.
Florida Housing's use of the Web to try to attract investors is similar to an effort begun this week by New Jersey when it launched a new Web site called www.buynjbonds.gov.
Although some mortgage-backed securities have a negative connotation because of those related to subprime mortgages and the collapse of that sector, Goltz pointed to the agency's strong indenture and ratings, which she said are expected to be in the double-A category from all three major rating agencies.
The official rating reports on this week's deal were not available at press time.
Goltz also pointed to favorable report by Moody's Investors Service last month.
Moody's report scored housing finance agencies around the county based on exposure to variable-rate debt, counterparty risk, and the status of single-family housing market values and portfolio performance. Florida Housing's portfolio had the least amount of risk in each of the three categories.
JPMorgan is the senior book-running manager on this week's deal. RBC Capital Markets and Citi are co-senior managers.
Tibor Partners Inc. is the agency's financial adviser. Kutak Rock LLP is bond counsel. GrayRobinson PA is underwriters' counsel. Nabors, Giblin & Nickerson PA is disclosure counsel.
The agency sold $100 million of 2008 Series 3 homeowner mortgage revenue bonds in September. The bonds priced to yield 2.4% in 2010, 5% in 2023, and 5.5% in 2039, according to Thomson Municipal Market Monitor. They were rated AA-plus by Fitch Ratings and Standard & Poor's, and Aa1 by Moody's.