Standard & Poor’s Ratings Services Upgrades NYCHDC Bond Rating To AA+; Recognizing Financial Strength, Financial Policies And Practices
First HDC Rating Issued Under New S&P Criteria Acknowledges “Strong Operating Performance” of HDC’s “Open Resolution”
September 22, 2014 New York, N.Y. New York City Housing Development Corporation (HDC) President Gary Rodney announced that Standard & Poor's Ratings Services raised its long-term rating and underlying rating to 'AA+' from 'AA' on HDC’s outstanding bonds under its Multi-Family Housing Bond Resolution – better known as the Open Resolution. The Open Resolution is HDC's largest single asset and most flexible financing vehicle. HDC established the Open Resolution in 1993 to permit the issuance of an unlimited amount of parity debt bonds. A parity resolution can be structured to handle a large volume of transactions and serve as an engine to continually leverage assets, while also being sustainable and profitable. This allows HDC to carry out financial strategies that are not only innovative but also sustainable.
The AA+ rating is based on S&P’s estimation of the HDC’s excellent strategy and management of the open resolution, the resolution's solid financial strength and strong operating performance, and the extremely high level of government support. They also cited “extremely strong financial policies and practices" regarding loan origination and portfolio monitoring. This is the first HDC rating issued under S&P's revised rating criteria, which was announced in June, 2014. Currently, the Open Resolution is secured by more than 950 mortgage loans, including 850 permanent and 75 construction loans. There more than $4.76 billion in bonds out-standing and in excess of $4.97 billion in multi-family loans, reserves and other assets.
“We are gratified by S&P’s recognition of the strength of HDC’s innovative Open Resolution, our management ability and our capacity to cover potential loan losses,” said President Rodney. “HDC has long been a leader among housing finance agencies in providing access to the capital necessary to create and preserve affordable housing. We are financially stronger than ever and primed to play a continuing and essential role in financing affordable housing across this city. This AA+ rating says to all of our current and potential investors that the market in New York City affordable housing is strong and that the great crew of professionals at HDC has a strong hand on managing all our assets strategically and with an eye on making solid investments in the City’s housing stock.”
“HDC has long been one of the top-performing Housing Finance Agencies in the nation,” said Vicki Been, HDC Board Chair and Commissioner of the City’s Department of Housing Preservation and Development. “They are an extraordinary asset to us in meeting the goals of Mayor Bill de Blasio’s Housing New York plan, offering access to capital in cases where it would otherwise be hard to come by, and permitting us to finance deeply affordable projects throughout the City. This ratings boost is evidence of the consistent, innovative, and careful stewardship of these investments by HDC’s management. I congratulate Gary Rodney, Rich Froehlich and Ellen Duffy in particular for this accomplishment.”
HDC, which is the largest HFA in the nation created to serve a single municipality, manages $13.1 billion of assets, including a multi-family portfolio of over 180,000 units with $8.95 billion in mortgage loans and loan interests as of January 31, 2014. Since its inception, HDC has issued $22.43 billion of mortgage revenue bonds and has $9.43 billion of bonds outstanding as of July 31, 2014. The 2013 calendar year was a record year, with a total issuance of $1.9 billion, including $656 million of Capital Fund Bonds for the New York City Housing Authority
About the New York City Housing Development Corporation (HDC):
HDC is the nation’s largest municipal Housing Finance Agency and is charged with helping to finance the creation or preservation of affordable housing under Mayor Bill de Blasio’s Housing New York plan. Since 2000, HDC has issued roughly 10% of all the multi-family housing revenue bonds in the U.S. and since 2003 HDC has financed 122,513 housing units using over $13.7 billion in bonds, and provided in excess of $1.5 billion in subsidy from corporate reserves. HDC is the #1 issuer in the nation of mortgage revenue bonds for affordable multi-family housing in eight of the last ten years (2013, 2012, 2010, 2009, 2008, 2006, 2005, & 2004). HDC bonds are rated Aa2/AA+ by Moody's and S&P. In Affordable Housing Finance magazine’s annual listing of the nation’s top ten funders of multi-family housing, HDC is the only municipal entity on the list. In 2013, HDC was the third largest affordable housing lender in the U.S. after Citi and Wells Fargo, beating out Bank of America, JPMorgan Chase and Capital One. Multi-family buildings financed by HDC contain more than 1.7 million square feet of commercial space. For additional information, visit: www.nychdc.com.