North Carolina commission approves $1.45 billion
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The North Carolina Local Government Commission approved two bond issuances totaling $1.451 billion on Tuesday.
The commission approved the North Carolina Housing Finance Agency’s $1.25 billion conduit revenue bonds to the market between this year and 2027. The bonds are rated Aa1 by Moody’s Ratings and AA-plus by S&P Global Ratings.
Bank of America is expected to be the lead underwriter and Morgan Stanley, Raymond James, RBC Capital Markets and Wells Fargo are expected to be co-managers.
The bond proceeds will be used primarily to purchase mortgage loans and other housing obligations, including mortgage-backed securities, aimed at making home ownership for low- and moderate-income households accessible.
The bonds’ maturities are not to exceed 40 years.
Caine Mitter & Associates is the municipal advisor. Womble Bond Dickinson is the bond counsel.
Wells Fargo Securities will serve as lead underwriter and J.P. Morgan Securities and Academy Securities will serve as co-managers.
DEC Associates will be the municipal advisor.
The bonds are rated triple-A by Moody’s, S&P and Fitch Ratings.
The new bond will have a 20-year term.
Parker Poe Adams & Bernstein will be bond counsel.
Separately, the commission approved hiring an outside auditor to examine the financial controls of the Winston-Salem/Forsyth County School District.
A report by State Auditor Dave Boliek recently found the district has a $46 million budget deficit and the school system “is on the verge of a financial crisis.” The district is one of the largest in the state.
“I have four teenagers and I don’t get mad very often but reading this makes me so angry for the people in Forsyth County who elected a school board that obviously wasn’t paying attention,” North Carolina Treasurer Brad Briner said, adding the problems at the district extend back at least to 2017.
Boliek’s report found “severely mismanaged” financial resources and “poor accounting procedures” at the district, which has no plan to resolve the problems, he said.
The district didn’t immediately respond to a request for a comment.
The State Board of Education has requested an audit it wants completed by the end of October, Briner said.
The district’s bonds are issued by Forsyth County, an independent entity, and are backed by property taxes. It is unclear whether the district’s financial problems will impact the county government or its bonds.
The county’s annual comprehensive financial report for fiscal 2024 said as of June 30, 2024, it had $1.2 billion in direct and overlapping debt. Forsyth County is currently rated triple-A by Moody’s and S&P.
The local government commission voted to withhold a portion of sales tax proceeds due to 11 local government units that are not in compliance with state law requiring submission of timely audit reports. It voted to not withhold the proceeds from 15 other municipalities. Each of the municipalities for which the commission curbed sales taxes, have populations under 12,000.
The commission approved several other bonds, each under $80 million.
