Fitch Affirms Alaska Housing Finance Corp.'s Short Term 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):
--$150 million commercial paper program ($ 81.3 million CP notes currently outstanding);
--$50 million general mortgage revenue bonds II;
--$140.8 million governmental purpose bonds;
--$161.8 million home mortgage revenue bonds;
--$55.6 million state capital project bonds;
--$50 million state capital project bonds II.
The internal liquidity support is secured from the self-liquidity funds of AHFC.
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.
HIGH LONG-TERM RATING: Sound financial ratios, a sizeable asset base, and strong management oversight provide support to AHFC's 'AA+' general obligation rating.
STRONG LIQUIDITY POLICIES: Proper policies are in place to ensure timely delivery of the cash amounts necessary to purchase tendered VRDOs or CP if necessary.
DECREASE IN LIQUID ASSET BASE: Any decreases in AHFC's liquid asset base could lower their respective coverage levels and put negative pressure on the short-term rating. However, the risk is remote given the corporation's strong management oversight.
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, 2013 the corporation's pool of highly liquid cash and marketable securities totaled a Fitch adjusted $954.6 million. Based on the Fitch adjusted $954.6 million and assuming CP is drawn to its maximum authorized amount, the available resources would cover outstanding variable rate bonds and CP by 1.57x.
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 which reflects its sound financial ratios, sizeable asset base, and strong management oversight.
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.
Posted: April 4, 2013