Bangkok--14 Jan--Standard & Poor's
Standard & Poor's Ratings Services raised its rating on California Housing Finance Agency's housing program bonds, series 2006B, to 'AAA/A-1+' from 'AA-/A-2', and removed the rating from CreditWatch with negative implications, reflecting a substitution of the enhancement. We expect that on Jan. 13, 2010 (the substitution date), the existing enhancement 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 bonds.
Standard & Poor's also assigned its 'AA-' underlying rating (SPUR) to the upgraded bonds. The SPUR is 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. The new support is expected to expire on Dec. 23, 2012, and as currently written, 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:
The C & L facility expiration date,
The honoring of a draw that reduces the principal portion of the C & L facility to zero,
The 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.
RELATED RESEARCH
USPF Criteria: Housing Finance Agencies, 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.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Karen Fitzgerald, San Francisco (1) 415-371-5023
Valerie White, New York (1) 212-438-2078
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_
[email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]