Fitch Affirms Alaska Housing Finance Corp.'s S-T Rating at 'F1+'
NEW YORK--()--Fitch Ratings affirms the short-term 'F1+' rating on the following obligations issued by the Alaska Housing Finance Corporation's (AHFC):
--$150 million commercial paper (CP) program ($24.6 million in CP notes currently outstanding);
--$145.5 million governmental purpose bonds;
--$60.3 million state capital project bonds;
--$161.8 million home mortgage revenue bonds.
The bonds detailed above and the CP program are general obligations of AHFC and are payable from the unencumbered funds and investments in the corporation's general account.
KEY RATING DRIVERS
SUFFICIENT LIQUID INTERNAL RESOURCES: Internal funds/cash reserves are well above 125% of outstanding short-term debt obligations, even after Fitch's stressed scenarios are incorporated.
MANAGEMENT EXPERTISE: Proper policies are in place to ensure timely delivery of the cash amounts necessary to purchase tendered variable rate debt obligations or CP if necessary.
The 'F1+' rating reflects AHFC's ability to cover by a minimum 1.25 times (x) the potential maximum liquidity demand presented by variable rate debt programs from internal, highly liquid resources. As of March 1 2012, the corporation's pool of highly liquid cash and marketable securities totaled a Fitch adjusted $791.3 million. Based on the Fitch adjusted $791.3 million and assuming CP is drawn to its maximum authorized amount, this pool would cover outstanding variable rate bonds and CP by 1.53x. The expected issuance of $50 million in VRDBs would reduce this coverage slightly, to 1.39x.
AHFC has specific policies in place in the event of a failed remarketing, mitigating concerns over a potential non-delivery of needed funds. In addition to sufficient reserves, the corporation's housing finance bond portfolio is performing well limiting the likelihood of a potential drain on program surpluses or unrestricted assets. Fitch currently has an 'AA+' rating on the corporation's general obligation pledge.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
--'Criteria for Assigning Short-Term Ratings Based on Internal Liquidity' (June 20, 2011);
--'State Housing Finance Agencies General Obligation Rating Criteria' (March 28, 2012);
--'Revenue-Supported Rating Criteria' (June 20, 2011).
Applicable Criteria and Related Research:
Criteria for Assigning Short-Term Ratings Based on Internal Liquidity
State Housing Finance Agencies General Obligation Rating Criteria
Revenue-Supported Rating Criteria
Posted: April 4, 2012