Bangkok--13 May--Standard & Poor's
Standard & Poor's Ratings Services placed its 'AA+' underlying rating (SPUR) on Utah Housing Corp.'s class I military housing revenue bonds series 2005A, issued for Boyer Hill Military Housing L.C., on CreditWatch with negative implications. Standard & Poor's also placed its 'AA' SPUR on Utah Housing Corp.'s class II military housing revenue bonds series 2005A, issued for Boyer Hill Military Housing L.C., on CreditWatch with negative implications. These actions reflect the current rating of CIFG Assurance North America Inc. (BB/Developing). All of the affected issues receive enhancement in the form of debt service reserve fund (DSRF) surety policies with CIFG Assurance North America Inc.
According to its current criteria for military housing privatizations, Standard & Poor's considers whether monies deposited in the DSRF, which is generally sized in the amount of at least six months debt service, is invested in investment grade securities rated 'BBB-' or higher, and will be available to pay debt service in the event of a shortfall. Because CIFG is currently rated below investment grade, its rating is no longer consistent with our minimum rating level for DSRF surety policies.
Standard & Poor's examined all housing bond issues with credit support from the above-mentioned surety provider, taking several factors into consideration. For military housing issues, which represent the majority of the affected ratings, we considered each issue's reliance on the DSRF surety policies to meet potential shortfalls for bond payment obligations. Should the issuers act to replace or cash fund the DSRF in investment grade securities, we will review the ratings upon the issuer's request.
RELATED RESEARCH
USPF Criteria: "Military Housing Privatizations," June 14, 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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