California State Treasurer Fiona Ma announced the sale of $1.05 billion in Social Bonds by the California Health Facilities Financing Authority for the State’s No Place Like Home (NPLH) program to provide housing and assistance to the State’s homeless population. The bonds are designated as “Social Bonds” because they follow the Social Bond Principles adopted by the International Capital Markets Association.
Proceeds from the bond sale will be used by the California Department of Housing and Community Development (HCD) to assist in the production of permanent supportive housing for people who are experiencing homelessness, chronic homelessness or who are at risk of chronic homelessness, and who are in need of mental health services.
“This successful sale of Social Bonds for the No Place Like Home Program marks another milestone in the state’s effort to provide permanent supportive housing for California’s most vulnerable populations,” Treasurer Ma stated. “I am thrilled that the California Health Facilities Financing Authority can play an integral role in offering innovative financing solutions that address society’s most vexing socioeconomic challenges.”
HCD has completed three rounds of NPLH program funding to date, with the fourth and final funding round planned for June 2022. Through the first three funding rounds, $772.3 million has been awarded to the following four counties which have five percent or more of the State’s homeless population and were designated by HCD as “alternative process counties:”
- $540.9 million to Los Angeles County
- $93.0 million to San Diego County
- $64.6 million to San Francisco County
- $73.7 million to Santa Clara County
In addition, $572.8 million has been awarded to the remaining counties throughout the State. An estimated 5,330 NPLH housing units will be produced through these awards. As of February 2022, over 100 NPLH projects were under construction, and construction of 20 projects throughout the State have been completed.
This is the third and final bond sale for the NPLH program. Upon delivery of the bonds, scheduled for April 7, the full $2 billion authorization of new money bonds pursuant to the existing NPLH legislation will be exhausted. The bonds are secured by a portion of the Proposition 63 tax, which is a 1 percent state tax on personal taxable income in excess of $1 million.
The 19-year fixed rate bonds were sold by an underwriting syndicate of 16 banks led by Raymond James & Associates, Inc and RBC Capital Markets, who served as the joint senior managers, and Loop Capital Markets, who served as the co-senior manager. The bonds are rated Aa3 by Moody’s Investors Service, AA- by S&P Global Ratings and AA- by Fitch Ratings. The all-in true interest cost on the bonds, which are subject to federal income tax, is 4.206 percent. Yields to investors ranged from 2.670 percent for the 2024 maturity to 4.353 percent for the 2041 maturity.
The calendar of all upcoming state bond sales is available at BuyCaliforniaBonds.com.