Bangkok--6 May--Standard & Poor's
Standard & Poor's Ratings Services said it took several rating actions on various debt issues of the California Housing Finance Agency (CalHFA):
-- We revised the outlook on the underlying ratings (SPURs) on CalHFA's home mortgage revenue bonds (HMRB), series 1999F, 2000Z, 2001O, 2002C, and 2004B to negative. We also affirmed our 'AA-' SPURs on the bonds.
-- In addition, we lowered our long-term rating on the series 1999F and 2004B bonds to 'AA-' from 'AA' and placed the rating on CreditWatch with positive implications. Series 1999F and 2004B are insured by National Public Finance Guarantee Corp., formerly known as MBIA Insurance Corporation of Illinois (AA-/Watch Dev). Based on our criteria, which provides that the issue credit rating on a fully credit-enhanced bond issue is the higher of the credit enhancer's rating or the underlying rating (i.e., the rating of the obligor), the long-term rating on the series 1999F and 2004B bonds is 'AA-/Watch Pos'.
-- We also revised the outlook to negative and removed the ratings from CreditWatch with negative implications on various other series under the HMRB resolution that are insured by FSA. These rating actions follow our placement of FSA's rating on negative outlook and removal from CreditWatch with negative implications on April 21, 2009.
-- The rating on series 2006C was changed to 'AA-/NR' from 'AA-/A-1+' due to the expiration and non-renewal of the standby bond purchase agreement from Calyon (AA-/A-1+). According to our criteria, the short-term rating of the bonds is based on the short-term rating of the liquidity provider. Because Calyon no longer provides liquidity support to the bonds, the short-term rating of the bonds has been changed to 'NR'.
-- Finally, we affirmed the 'AA-' long-term rating and negative outlook on the remaining issues under CalHFA's HMRB resolution.
The negative outlook on the long-term ratings on the HMRB program reflects our assessment of 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 general obligation pledge remains within CalHFA's capital capacity, the rating should likely be maintained.
RELATED RESEARCH
-- USPF Criteria: "Single-Family Whole Loan Programs," June 14, 2007
-- USPF Criteria: "Review Of Investment Agreements For Municipal Revenue Bond Financings," June 26, 2007
-- USPF Criteria: "Bank Liquidity Facilities," June 22, 2007
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.
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Lawrence Witte, San Francisco (1) 415-371-5037