Additionally, Fitch affirms approximately
The Rating Outlook for all the bonds is Stable.
The bonds are general obligations of the AHFC for which its full faith and credit is pledged.
KEY RATING DRIVERS
STRONG ISSUER FINANCIAL POSITION: AHFC consistently has one of the highest financial strength profiles relative to its peers which contribute to its 'AA+' GO rating. Despite net operating losses over the last few years, the sizable asset base allows the corporation to maintain its credit strength.
SUCCESSFUL MANAGEMENT PERSONNEL: AHFC has a well-tenured, strong management staff that continues to demonstrate the financial flexibility to address market challenges.
GEOGRAPHIC CONSTRAINTS: A high portion of AHFC's loan portfolio, which provides security for other bonds which also have GO backing, lies in or around the city of
STRONG UNDERLYING ASSETS: The aggregate underlying mortgage portfolio of the AHFC has performed adequately and has a current delinquency rate of only 2.2% (60+ days) which is lower than state and national averages.
INCREASED STATE TRANSFERS: Under current legislative policies, transfers from AHFC to the state of
The 2014 series D bonds are the 8th series of bonds to be issued under the SCPB II Indenture and have a final maturity date of 2029. The bond proceeds are expected to be used to reimburse the corporation for certain governmental expenditures. No mortgage loans are pledged to the bonds, as the GO of the corporation is the sole security for the bonds. Therefore, the 'AA+' rating on the bonds reflects the rating on AHFC's GO debt pledge.
AHFC continues to illustrate its strong financial position despite net losses for the last few years. The corporation has continuously maintained strong leverage and profitability ratios. As of FY 2013, the corporation had a debt-to-equity ratio (DTE) of 1.5x and a net interest spread (NIS) of 28.2%. Both ratios are better than the DTE and
A credit concern going forward is the corporation's relationship with the state of
An additional credit concern centers around the geographic concentration in AHFC's loan portfolio.
Fitch affirms the 'AA+' rating on the following AHFC bonds:
--Housing Mortgage Revenue Bank bonds, series 2009 A.
Additional information is available at 'www.fitchratings.com'.
--'State Housing Finance Agencies General Obligation Rating Criteria' (
--'Revenue-Supported Rating Criteria' (
State Housing Finance Agencies General Obligation Rating Criteria
Revenue-Supported Rating Criteria
Source: Fitch Ratings
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OCTOBER 30, 2014
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