Bangkok--14 Jan--Standard & Poor's
Standard & Poor's Ratings Services raised its ratings on 10 series of California Housing Finance Agency's multifamily housing revenue bonds III to 'AAA/A-1+' from their prior ratings and removed the ratings from CreditWatch with negative implications, reflecting a substitution of the enhancement. We expect that on Jan. 14, 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 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. 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. 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 an 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:
multifamily housing revenue bonds III, series 2000 A: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
multifamily housing revenue bonds III, series 2000 B: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
multifamily housing revenue bonds III, series 2000 C: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
multifamily housing revenue bonds III, series 2000 D: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
multifamily housing revenue bonds III, series 2002 B: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
multifamily housing revenue bonds III, series 2002 C: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1+
multifamily housing revenue bonds III, series 2005 D: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-2
multifamily housing revenue bonds III, series 2006 A: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-2
multifamily housing revenue bonds III, series 2007 B: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1
multifamily housing revenue bonds III, series 2007 C: to AAA/A-1+/NM; AA-/Watch Negative (SPUR) from AA-/Watch Negative/A-1
RELATED RESEARCH
USPF Criteria: Housing Finance Agencies, June 14, 2007
USPF Criteria: Affordable Multifamily Housing Pooled Financings, June 13, 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:
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Analyst Contacts:
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Lawrence Witte, San Francisco (1) 415-371-5037