Sign in Subscribe
Moody's Investors Service Inc.

Moody's Assigns Aa2 Rating to New York City Housing Development Corporation's Sustainable Development Bonds

Strategic Insights

— 1 min read

The New York City Housing Development Corporation (the Corporation) has issued its second series of Housing Impact Bonds, with Moody's Investors Service assigning an Aa2 rating to the proposed $85 million Housing Impact Bonds, 2025 Series A (Sustainable Development Bonds) and $163.4 million Housing Impact Bonds, 2025 Series B (Federally Taxable) (Sustainable Development Bonds). The rating is based on the loan enhancement provided by Freddie Mac, Fannie Mae, and the Corporation's general obligation pledge. The credit enhancement protects bondholders from loan delinquencies or foreclosures within the portfolio. The rating also reflects the bond resolution's flexibility to contain loans backed by a range of security providers as well as unenhanced loans.

Key Takeaways:

  • The Aa2 rating on the bonds is based on the loan enhancement provided by Freddie Mac, Fannie Mae, and the Corporation's general obligation pledge, protecting bondholders from loan delinquencies or foreclosures.
  • The credit enhancement on the loans will maintain a stable outlook, with potential for upgrades if the asset-to-debt ratio improves and the security types strengthen.
  • The bond program is exposed to potential downgrade risks if there is weak financial performance, including asset-to-debt ratios below 1.0x coverage or losses.
  • The PACT strategy is a 10-year plan to rehabilitate and preserve 62,000 units of public housing in developments currently owned by the New York City Housing Authority (NYCHA).
  • As of April 30, 2025, the aggregate principal balance of Bonds Outstanding is $1,435,640,000.

Statistics:

  • The proposed $85 million Housing Impact Bonds, 2025 Series A (Sustainable Development Bonds) and $163.4 million Housing Impact Bonds, 2025 Series B (Federally Taxable) (Sustainable Development Bonds) have been assigned an Aa2 rating.
  • The bond resolution's flexibility to contain loans backed by a range of security providers as well as unenhanced loans has been reflected in the rating.
  • The Corporation's general obligation pledge to the bond program has been maintained at an Aa2 rating.
  • As of April 30, 2025, the aggregate principal balance of Bonds Outstanding is $1,435,640,000.

Sources:

  • Moodys Ratings (Moody's) has issued the following news release.
  • Rating Methodologies: US Housing Finance Agency Multifamily, published in April 2024, and available at https://ratings.moodys.com/rmc-documents/418242.

Read more