What is the opportunity?
The Illinois Housing Development Authority (the "Authority") is issuing 92 million1 in Series C Non-AMT Revenue Bonds (the "Bonds"). The proceeds of the Bonds will be used to (i)purchase, and/or reimburse the Authority for its prior purchase of, mortgage backed securities guaranteed as to timely payment of principal and interest by the Government National Mortgage Association or the Federal National Mortgage Association, (ii) finance second-lien loans for down payment assistance or closing cost assistance that will not be Pledged Property under the Indenture, and (iii) pay or reimburse the Authority for certain costs incurred in connection with the issuance of the Series 2019C Bonds. See the Preliminary Official Statement for more details.
The Bonds are special limited obligations of the Authority. Together with other bonds previously issued or to be issued under the General Indenture, the Bonds have a claim for payment solely from Pledged Property, including Revenues derived from Mortgage Loans and Mortgage-Backed Securities and certain Funds and Accounts held by the Trustee. The Bonds are not general obligations of the Authority, do not constitute a debt of and are not guaranteed by the State of Illinois or the United States or any agency, and are not secured by a pledge of the full faith and credit of the state of Illinois or the United States or any instrumentality thereof. See the Preliminary Official Statement for more details.
Housing bonds are securities backed by mortgages and mortgage loan repayments. Although not reflected as part of a traditional "call schedule," these bonds can be called at any time from the prepayment of principal on the housing authority's underlying mortgages, and therefore display as continuously callable and subject to extraordinary redemption (ER) provisions.
The bonds are subject to optional and mandatory sinking fund redemption prior to maturity as described in the Preliminary Official Statement.
The Bonds are expected to be rated AAA by Moody's.2
The bond sale offers attractive benefits to individual investors including prices and yields that match those available to institutional investors and the potential for stable income through the call dates. And, for Illinois residents, federal and state tax-exemption on the bond coupon payments.
How to place an order
The offering is expected to price the week of June 10, 20191 although market conditions and/or the discretion of the issuer may alter the anticipated timeline. Individual investors can place orders online or by calling a Fidelity representative at 800-544-5372. To stay up-to-date on pricing, credit rating changes, and more, please sign up for Fidelity Alerts and see our Municipal Bond New Issue Offerings.