North Carolina state conduit issuer will allow longer maturities

The North Carolina Capital Facilities Finance Authority extended the maximum maturity of bonds it issues as a conduit to 40 years.

North Carolina State Treasurer Brad Briner said the longer potential amortization should attract more borrowers to use the authority to issue bonds instead of going to an out-of-state conduit.

The authority "essentially" stopped issuing bonds in 2023, Briner said at a meeting of the authority last week. He is the chairman of the authority's board.

Since 2012, the NCCFFA's statutes on amortization schedule required bonds to amortize over either 20 or 25 years, depending on bond type.

North Carolina issuers have turned to using Wisconsin-based national conduit Public Finance Authority to avoid the maturity limit and because the PFA reviews the financial status of the issuers faster than the NCCFFA does, Briner said.

It would be better for the local authority to oversee issuers from the state, Briner said.

Briner said compared to the bonds being issued by the Wisconsin PFA, NCCFFA bonds would offer quarter to half a percent lower interest rates. Making the local authority the preferred issuer would make it the watchdog of issuance, reviewing the issuance's financial conditions.

The authority's board unanimously approved the extension of the maximum maturity of bonds.

The NCCFFA is a conduit issuer of tax-exempt financing to non-profit institutions providing elementary, secondary, and higher education and various other entities for special purpose projects serving a public interest, according to the state treasurer's website.

There was a total of $6.969 billion in municipal bond issuance from North Carolina in 2024, up 11.4% from a year earlier, according to LSEG data.