Bangkok--3 Mar--Standard & Poor's
Standard & Poor's Ratings Services revised its outlook to negative from positive and affirmed its 'AA-' long-term rating on California Housing Finance Agency's (CalHFA) home mortgage revenue bond (HMRB) resolution.
"The negative outlook reflects our opinion of the deteriorating strength of the real estate portfolio, which is experiencing some effects from the California housing market, as well as some cash flow projections indicating demonstrated shortfalls in August 2010," said Standard & Poor's credit analyst Larry Witte. "Further pressuring the rating in our view is the reliance on CalHFA to support the resolution from its general fund. Should the issuer's capital adequacy experience additional stress for other needs of CalHFA, the rating could be downgraded. If the GO pledge remains within CalHFA's capital capacity, the rating should be maintained."
If pledged revenues under the resolution are insufficient to cover debt service and fees at any point during the life of the bonds, CalHFA has indicated that it will access its other potential funding sources as well as other tools to manage the ongoing position of the resolution. Standard & Poor's will monitor the resolution's exposure to ongoing credit risk and market risk to assess its ongoing credit quality.
Standard & Poor's receives monthly updates from CalHFA on the performance of its HMRB loans, and will continue to monitor performance.
Complete ratings information is available to RatingsDirect subscribers at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Find a Rating.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Lawrence Witte, San Francisco (1) 415-371-5037
Karen Fitzgerald, San Francisco (1) 415-371-5023
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
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