Bangkok--7 Jan--Standard & Poor's,
Standard & Poor's Ratings Services raised its ratings on 10 series of California Housing Finance Agency's (CalHFA) home mortgage revenue bonds to 'AAA/A-1+' from their prior ratings, reflecting a substitution of the enhancement. We expect that on Jan. 6, 2010 (the substitution date), the existing enhancements will be terminated and replaced under the U.S. Treasury's Temporary Credit and Liquidity Program (TCLP). Under TCLP, one master irrevocable standby temporary credit and liquidity facility (C & L facility), issued by Fannie Mae and Freddie Mac (collectively, the GSEs) in favor of the trustee, will support the 10 series of bonds.
Standard & Poor's also assigned its 'AA-' underlying ratings (SPURs) to the 10 series of upgraded bonds. The SPUR remains on CreditWatch with negative implications.
After the substitution date, the GSEs will provide both credit and liquidity support for both tenders and scheduled bond payments. We expect that the new support will expire on Dec. 23, 2012, and as currently written, it does not allow for extension. The bonds will be remarketed in a variable-rate weekly mode, and interest is payable on each Feb. 1 and Aug. 1. If a bondholder elects to tender its bonds, it must provide seven days' notice of such intent.
The credit facility terminates on the earliest of:
C & L facility expiration date;
The honoring of a draw that reduces the principal portion of the C & L facility to zero;
Conversion to a interest rate mode other than the weekly interest rate mode; or
The C & L facility provider's receipt of notice that no bonds are outstanding or that the trustee has received an alternate credit facility.
The affected issues are:
home mortgage revenue bonds, series 2000 J: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AAA/Negative/NR; AA-/Watch Negative (SPUR)
home mortgage revenue bonds, series 2000 N: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AAA/Negative/NR; AA-/Watch Negative (SPUR)
home mortgage revenue bonds, series 2000 X: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AAA/Negative/A-1; AA-/Watch Negative (SPUR)
home mortgage revenue bonds, series 2001 U: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
home mortgage revenue bonds, series 2002 J: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1
home mortgage revenue bonds, series 2002 Q: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
home mortgage revenue bonds, series 2003 F: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AAA/Negative/A-1; AA-/Watch Negative (SPUR)
home mortgage revenue bonds, series 2003 H: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AAA/Negative/A-1; AA-/Watch Negative (SPUR)
home mortgage revenue bonds, series 2003 M: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1
home mortgage revenue bonds, series 2005 D: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/NR
RELATED RESEARCH
USPF Criteria: Single-Family Whole Loan Programs, June 14, 2007
Criteria: Methodology And Assumptions: Approach To Evaluating Letter Of Credit-Supported Debt, July 6, 2009
Complete ratings information is available to RatingsDirect on the Global Credit Portal subscribers at www.globalcreditportal.com and 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. Use the Ratings search box located in the left column.
Information regarding Standard & Poor's 2010 Housing Conference scheduled for February 10-12, 2010 at the Hyatt Regency Grand Cypress Orlando, Florida can be obtained at www.events.standardandpoors.com/housing or by contacting Events Marketing at 212.438.2800.
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