Fitch assigns an 'AAA' rating to the following issues
for the Indiana Housing and Community Development Authority's
(formerly Indiana Housing Finance Authority):
-- $60 million single-family mortgage revenue bonds, 2006 series A-1 'AAA';
-- $40 million fixed-rate single-family mortgage revenue bonds, series A-2 'AAA/F1+'.
Additionally, Fitch affirms the 'AAA' rating on the following outstanding issues for the Indiana Housing Finance Authority (totaling approximately $907 million):
-- 1998 series A-D bonds;
-- 1999 series A, X, Y, Z bonds;
-- 2000 series A-D bonds;
-- 2001 series A-C bonds;
-- 2002 series A-D bonds;
-- 2003 series A-D bonds;
-- 2004 series A-C bonds;
-- 2005 series A, B-1, B-2 and B-3, C and D bonds.
The 2006 series A-1 bonds are expected to be sold through negotiation the week of Feb. 13, 2006 by a syndicate led by Goldman, Sachs & Co. The 2006 series A-2 bonds, are expected to be sold through negotiation on or about March 23, 2006. The underwriter and remarketing agent for the 2006 series A-2 bonds, will be Goldman, Sachs & Co.
Both series of bonds, are being issued to provide approximately $100 million to continue the authority's single-family homebuyer program through the purchase of Government National Mortgage Association (Ginnie Mae) and Federal National Mortgage Association (Fannie Mae) guaranteed mortgage-backed certificates.
The short-term 'F1+' rating on the 2006 series A-2 bonds, is based on the liquidity support provided by a standby bond purchase agreement (SBPA) issued by DEPFA Bank PLC, acting through its New York Branch. The SBPA provides for payment of purchase price of tendered bonds, and is sized to cover the principal portion of the purchase price and 187 days of interest at a rate of 15% based on a 365-day year. The short-term rating on the bonds, will expire on March 23, 2016, the stated expiration date of the SBPA, unless such date is extended, or upon any earlier expiration or termination of the SBPA.
The series 2006 A-2 bonds, will be issued in an initial interest rate period, extending from closing to Sept. 28, 2006. Interest will be paid on Sept. 29, 2006, the mandatory tender date scheduled in connection with the end of this initial interest rate period. Following the mandatory tender, the bonds, will be converted and remarketed in a weekly interest rate mode. Thereafter, the bonds, may be converted to a daily, flexible, long-term, fixed or auction rate interest rate mode. During the daily and weekly modes, holders have the option to tender their bonds, for purchase with prior notice. These bonds, are also subject to mandatory tender: (i) upon conversion of the interest rate mode, except when converting between daily and weekly interest rate modes; (ii) on the fifth business day prior to the expiration of the SBPA; (iii) on the business day prior to the termination of the SBPA; (iv) on the effective date of a substitute SBPA; (v) during the flexible and term rate modes, on the first business day after the end of each flexible or term rate period; and (vi) during a daily or weekly interest rate mode, on any date designated by the Authority.
The long-term rating on both series of bonds, reflects:
-- Current and projected composition of the single-family mortgage portfolio, which consists primarily of Ginnie Mae and Fannie Mae guaranteed mortgage certificates;
-- High level of overcollateralization that exists within the indenture; and
-- The program's financial performance.
As of Jan. 1, 2006, more than 98.8% of the mortgage portfolio consisted of Ginnie Mae and Fannie Mae mortgage-backed certificates, which are fully guaranteed for timely payment regardless of the actual performance of underlying loans. Ginnie Mae securities are guaranteed by the U.S. government; Fitch rates Fannie Mae mortgage-backed securities 'AAA'. The mortgage loans not guaranteed by certificates (whole loans) are generally covered by primary mortgage insurance.
The combination of timely payment performance from mortgage certificates and deep levels of mortgage insurance on the whole loans provides a strong cushion against portfolio deterioration or cash flow interruption. Additionally, the program remains well over-collateralized, providing an additional layer of security and liquidity.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.
-- $60 million single-family mortgage revenue bonds, 2006 series A-1 'AAA';
-- $40 million fixed-rate single-family mortgage revenue bonds, series A-2 'AAA/F1+'.
Additionally, Fitch affirms the 'AAA' rating on the following outstanding issues for the Indiana Housing Finance Authority (totaling approximately $907 million):
-- 1998 series A-D bonds;
-- 1999 series A, X, Y, Z bonds;
-- 2000 series A-D bonds;
-- 2001 series A-C bonds;
-- 2002 series A-D bonds;
-- 2003 series A-D bonds;
-- 2004 series A-C bonds;
-- 2005 series A, B-1, B-2 and B-3, C and D bonds.
The 2006 series A-1 bonds are expected to be sold through negotiation the week of Feb. 13, 2006 by a syndicate led by Goldman, Sachs & Co. The 2006 series A-2 bonds, are expected to be sold through negotiation on or about March 23, 2006. The underwriter and remarketing agent for the 2006 series A-2 bonds, will be Goldman, Sachs & Co.
Both series of bonds, are being issued to provide approximately $100 million to continue the authority's single-family homebuyer program through the purchase of Government National Mortgage Association (Ginnie Mae) and Federal National Mortgage Association (Fannie Mae) guaranteed mortgage-backed certificates.
The short-term 'F1+' rating on the 2006 series A-2 bonds, is based on the liquidity support provided by a standby bond purchase agreement (SBPA) issued by DEPFA Bank PLC, acting through its New York Branch. The SBPA provides for payment of purchase price of tendered bonds, and is sized to cover the principal portion of the purchase price and 187 days of interest at a rate of 15% based on a 365-day year. The short-term rating on the bonds, will expire on March 23, 2016, the stated expiration date of the SBPA, unless such date is extended, or upon any earlier expiration or termination of the SBPA.
The series 2006 A-2 bonds, will be issued in an initial interest rate period, extending from closing to Sept. 28, 2006. Interest will be paid on Sept. 29, 2006, the mandatory tender date scheduled in connection with the end of this initial interest rate period. Following the mandatory tender, the bonds, will be converted and remarketed in a weekly interest rate mode. Thereafter, the bonds, may be converted to a daily, flexible, long-term, fixed or auction rate interest rate mode. During the daily and weekly modes, holders have the option to tender their bonds, for purchase with prior notice. These bonds, are also subject to mandatory tender: (i) upon conversion of the interest rate mode, except when converting between daily and weekly interest rate modes; (ii) on the fifth business day prior to the expiration of the SBPA; (iii) on the business day prior to the termination of the SBPA; (iv) on the effective date of a substitute SBPA; (v) during the flexible and term rate modes, on the first business day after the end of each flexible or term rate period; and (vi) during a daily or weekly interest rate mode, on any date designated by the Authority.
The long-term rating on both series of bonds, reflects:
-- Current and projected composition of the single-family mortgage portfolio, which consists primarily of Ginnie Mae and Fannie Mae guaranteed mortgage certificates;
-- High level of overcollateralization that exists within the indenture; and
-- The program's financial performance.
As of Jan. 1, 2006, more than 98.8% of the mortgage portfolio consisted of Ginnie Mae and Fannie Mae mortgage-backed certificates, which are fully guaranteed for timely payment regardless of the actual performance of underlying loans. Ginnie Mae securities are guaranteed by the U.S. government; Fitch rates Fannie Mae mortgage-backed securities 'AAA'. The mortgage loans not guaranteed by certificates (whole loans) are generally covered by primary mortgage insurance.
The combination of timely payment performance from mortgage certificates and deep levels of mortgage insurance on the whole loans provides a strong cushion against portfolio deterioration or cash flow interruption. Additionally, the program remains well over-collateralized, providing an additional layer of security and liquidity.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.