Standard & Poor’s last week upgraded the Massachusetts Housing Finance Agency to A-plus from A, citing the sizeable asset base of $5.56 billion that makes it one of the largest state housing agencies that the rating agency reviews. The outlook is stable.
“The upgrade reflects our view of MassHousing’s financial resources, which we believe should help it to mitigate the potential impact of market volatility, as well as absorb the risk contained within portions of MassHousing’s portfolio,” said credit analyst Moraa Andima in a press release.
While MassHousing’s net income declined by 48% in fiscal 2008 — which ended June 30 — from fiscal 2007, the agency’s net income increased by a range of 22% to 44% in prior years.
In addition, Standard & Poor’s said the 48% drop last year “maintained in our view a strong net interest margin, while continuing to provide financing for affordable homeownership and housing development in a difficult market environment.”
Because of increased demand for affordable single-family and multifamily housing in Massachusetts, the state one year ago allocated $395 million of private-activity bond capacity for MassHousing for 2008, up from its $270 million allotment in 2007.
“Our financial staff has steered a straight course through some perilous waters over the last year or so,” executive director Thomas Gleason said in a prepared statement. “With a strong and stable financial base, the rest of the MassHousing team has been free to develop innovative loan products that are in strong demand in the marketplace, and that’s really where we add value these days, given that many lenders have curtailed or restricted their business.”
MassHousing has roughly $4 billion of outstanding debt in its single-family and multifamily bond programs combined. Moody’s Investors Service rates the agency Aa2.
