DALLAS — Standard & Poor’s on Wednesday upgraded the New Mexico Finance Authority to AAA from AA-plus ahead of a $16 million issue of senior-lien tax-backed bonds.
Moody’s Investors Service had not assigned a rating as of Wednesday afternoon, but the agency had the NMFA on its watch list for a possible upgrade to Aaa from Aa1.
Fitch Ratings does not rate the agency.
The authority, created in 1992, has been making pool loans since its first financing in 1995.
Its board and criteria committee and the legislative oversight committee review debt and loan-management policies that have improved program oversight in the past few years, according to Standard & Poor’s.
No pool loans have defaulted in during the program’s 15-year history of making loans.
Including loans not reimbursed with bonds, but for which the NMFA pledges to provide debt service, the senior-lien pool contains more than 450 individual loans, with a current loan balance of about $900 million.
The 10 leading borrowers account for a little more than half of the total senior-lien loan balance.
The top three borrows are the Albuquerque Bernalillo County Water Utility Authority, the New Mexico General Services Department, and the city of Santa Fe.
The NMFA’s share of gross governmental receipts taxes has seen positive growth in every year since 1996 except 2002. Growth has varied, with rates of 1% or less in 2008 and 2009 but 7.3% in 2010.
“Overall, we believe the revenue has shown some stability,” Standard & Poor’s noted in its 2010 report.
Since it was founded, the authority has provided nearly $4 billion in capital to communities and companies covering a wide array of projects, ranging from emergency communications systems for local authorities to a commuter rail project from Albuquerque to Santa Fe.
Moody’s noted the NMFA’s “strong management oversight, formalized distribution controls, and strong portfolio credit quality.”
“Additional rating considerations include the authority’s sizable pool of borrowers, a diverse pledge from pooled participants, and additional liquidity provided by borrower debt service reserve and authority liquidity,” analysts said.
