Bangkok--2 Nov--Standard & Poor's
Standard & Poor's Ratings Services placed its 'AA+' rating on Montana Board of Housing's single-family I indenture mortgage revenue bond parity resolution on CreditWatch with negative implications. This action follows Standard & Poor's withdrawal of the ratings on Bayerische Landesbank and Bayerische Landesbank GUARANTEED. For more information, see the article published Oct. 19, 2009, on RatingsDirect.
The affected issues receive partial support in the form of guaranteed investment contracts or investment agreements for their debt service reserve, float, revenue and/or debt service funds from Bayerische Landesbank or Bayerische Landesbank GUARANTEED. According to our current criteria, in partially dependent transactions where certain funds may significantly contribute to the payment of bond debt service, those funds are invested in securities with ratings appropriate for the rating of the issue, and other moneys can be invested in investment-grade securities. Because Bayerische Landesbank and Bayerische Landesbank GUARANTEED are no longer rated by Standard & Poor's, under our analysis pursuant to our criteria, we do not consider guaranteed investment contracts or investment agreements with either of these entities to be eligible investments for partially dependent financings.
Should an issuer act to terminate, replace, or guarantee the existing agreement(s), and to provide cash flows that demonstrate the ability to make bond debt service payments without relying on the interest earnings from the agreement(s), we will analyze the cash flow projections to evaluate whether to affirm the bond ratings. Alternatively, if the issuer determines to maintain the existing investment agreement(s), and provides cash flows or otherwise demonstrates the ability to make bond debt service payments without relying on funds on deposit in the investment agreement(s), we will analyze the cash flow projections to evaluate whether to affirm the bond ratings. If, in either case, we believe that full and timely debt service on the bonds cannot be made, we will analyze the cash flow projections and take any rating action on the bonds that we consider appropriate, unless some other remedial action is taken by the issuer, which we would then evaluate.
RELATED RESEARCH
USPF Criteria: "Review Of Investment Agreements For Municipal Revenue Bond Financings," June 26, 2007
USPF Criteria: "Single-Family Whole Loan Programs," 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.
Media Contact:
David Wargin, New York (1) 212-438-1579, [email protected]
Analyst Contacts:
Karen Fitzgerald, San Francisco (1) 415-371-5023
Renee J Berson, New York (1) 212-438-7966
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Americas Media Relations: (1) 212-438-6667
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