The New York State Housing Finance Agency this week plans to convert $173.3 million of auction-rate bonds into variable-rate demand obligations. The conversion will be the second this year for the authority, which is considering a third conversion next month to get bonds out of the volatile auction-rate market.

The bonds were sold in 2005 with a 33-year maturity to finance the construction of a 36-story, 407 unit multifamily housing development at 55 West 25th Street in Manhattan. Fannie Mae provided credit enhancement on the bonds and will provide liquidity for them when they convert.

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