CHICAGO — Standard & Poor's upgraded the Illinois Housing Development Authority's issuer credit rating and all debt supported by its general obligation pledge one level to AA-minus in recognition of its strong overall financials.
At the higher level, the rating agency assigned a stable outlook. The housing authority's previous rating of A-plus had carried a positive outlook. Standard & Poor's affirmed IHDA's AA ratings on its single family mortgage revenue bond and multifamily housing bond programs.
The credit upgrade was supported by the authority's strong leverage ratios when compared to equally rated peers and year-over-year reductions in interest expenses and reversals in loan-loss provisions that contributed to improved net interest margins in fiscal 2012. It also benefits from "strong financial management practices" and strong asset management practices that contributed to a strong loan assets portfolio.
"In our view, IHDA's continuing strong capital adequacy positions the authority for stable performance in the medium term," said Standard & Poor's analyst Moraa C. Andima. "We will continue to assess how the authority responds to market conditions, including how its transition to a business model of purchasing and selling mortgage-backed securities secured by homeownership loans affects its profitability and leverage."
IHDA executive director Mary R. Kenney said the upgrade will lower the agency's borrowing costs which would in turn allow it to lower interest costs for the benefit of homeowners and developers that participate in its programs and products.
Deals on tap for this year include an up to $11 million multifamily housing revenue bond sale to finance the acquisition and renovation of a 118-unit development in Belvidere and an up to $100 million housing revenue bond issue, according to spokeswoman Rebecca Boykin.
