News Column

Fitch to Downgrade Idaho Hsg & Fin Assoc S-F Mtge Class I VRBs (2003 Indenture) S-T Rating to 'F1'

June 24, 2014

NEW YORK--(BUSINESS WIRE)-- On the effective date of June 25, 2014, Fitch Ratings will downgrade the short-term ratings to 'F1' from 'F1+' assigned to the following $75,760,000Idaho Housing and Finance Association (IHFA) Single Family Mortgage Class I Variable Rate bonds (the bonds) issued under the 2003 General Trust Indenture, consisting of:

--$7,970,000 2003 Series A

--$7,050,000 2003 Series B

--$4,915,000 2003 Series C

--$5,510,000 2003 Series D

--$6,725,000 2003 Series E

--$6,590,000 2004 Series A

--$7,150,000 2004 Series B

--$9,060,000 2004 Series C

--$10,295,000 2005 Series D

--$10,495,000 2005 Series E

The short-term rating action is in connection with: (1) the substitution of the liquidity support provided by Fannie Mae and the Federal Home Loan Mortgage Corporation (each rated 'AAA/F1+', Stable Outlook) in the form of a Temporary Credit and Liquidity Facility (TCLF), with a substitute liquidity facility in the form of a Standby Bond Purchase Agreement (SBPA) to be issued by Barclays Bank plc (Barclays, rated 'A/F1', Stable Outlook); and (ii) the mandatory tender of the bonds, which will occur on June 25, 2014.

KEY RATING DRIVERS:

On the effective date, the short-term 'F1' ratings will be based on the substitute SBPA provided by Barclays. The long-term 'AAA' ratings assigned to the bonds continue to be based on the ratings assigned to Idaho Housing Finance Association's Class I Variable Rate Bonds issued under the 2003 General Trust Indenture (rated 'AAA'). The Rating Outlook is Stable for the long-term rating. For more information on the long-term rating, see the press release dated April 7, 2014 'Fitch Affirms Idaho Housing & Finance Association's 2003 Indenture & GO Pledge' available on Fitch's website at www.fitchratings.com.

The substitute SBPA provides for the payment of the total principal component of purchase price for all series plus an amount equal to 186 days of interest for each series calculated at a maximum rate of 12%, based on a year of 365 days. The principal and interest amount is available for tendered bonds during the weekly, monthly, quarterly, and semiannual rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on June 23, 2017, the stated expiration date, unless such date is extended; upon conversion of all series of bonds to an interest rate mode other than the weekly, monthly, quarterly, or semiannual rate modes; or upon the occurrence of certain other events of default which result in a mandatory tender or other termination events related to the credit of IHFA's Class I Variable Rate Bonds under the 2003 General Trust Indenture which result in an automatic and immediate termination. The short-term 'F1' ratings will expire on the expiration or prior termination of the SBPA.

A mandatory tender of the bonds is scheduled to occur on the SBPA substitution date on June 25, 2014. The remarketing agent for the bonds is Barclays Capital Inc.

RATING SENSITIVITIES:

The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of IHFA's Class I Variable Rate Bonds under the 2003 General Trust Indenture. The long-term rating is exclusively tied to the creditworthiness of IHFA's Class I Variable Rate Bonds under the 2003 General Trust Indenture and will reflect all changes to that rating.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'U.S. Municipal Structured Finance Criteria', Feb. 24, 2014;

--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', Jan. 27, 2014.

Applicable Criteria and Related Research:

Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730736

U.S. Municipal Structured Finance Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.



Fitch Ratings

Primary Analyst

Kasia Reed

Analytical Consultant

+1-212-908-0500

Fitch Ratings, Inc.

33 Whitehall Street

New York, NY 10004

or

Secondary Analyst

Trudy Zibit

Managing Director

+1-212-908-0689

or

Committee Chairperson

Mario Civico

Senior Director

+1-212-908-0796

or

Media Relations

Alyssa Castelli, +1 212-908-0540

alyssa.castelli@fitchratings.com

Source: Fitch Ratings


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