Bangkok--13 Jan--Standard & Poor's
Standard & Poor's Ratings Services revised its rating on the Colorado Housing and Finance Authority's class I adjustable-rate multifamily project bonds, series 2006A, to 'AAA/A-1+' from 'AAA/A-2' following the substitution of a standby bond purchase agreement (SBPA) from the Barclays Bank PLC ('A-1+' short-term rating) for Depfa Bank PLC ('A-2' short-term rating) on Jan 13, 2010. The SPBA will cover 100% of principal and interest for 183 days.
The SBPA expires on Jan. 13, 2011, unless terminated earlier according to its terms. The only automatic termination event without notice is for the downgrade of the long-term rating on the bonds, currently 'AAA', to below 'BBB-'. Should the long-term rating on the bonds, currently 'AAA', be downgraded below 'BBB-', the option of the bondholders to tender their bonds would not terminate, but the obligor would not be obligated to purchase the bonds.
The stable outlook on the long-term component of the rating reflects our view of the strength of the mortgage collateral, adequate credit and liquidity coverage, and management's strong oversight. Asset-to-liability parity is currently at 159% for class I bonds and above 106% for class II bonds, and capital adequacy is at an acceptable level. The agency's proactive management going forward will be critical to ensure rating maintenance, as well as our assessment that consolidated cash flows and agency capital are adequate to absorb the risks at the current rating level.
RELATED RESEARCH
USPF Criteria: Bank Liquidity Facilities, June 22, 2007
USPF Criteria: Standby Bond Purchase Agreement Automatic Termination Events, April 11, 2008
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.
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