Standard & Poor's Ratings Services said it has raised its issuer credit rating on Chicago Housing Authority, Ill. to AA from AA-minus.
At the same time, Standard & Poor's said it has raised its long-term rating on CHA's $25 million taxable revenue bonds series 2010 Build America Bonds to AA from AA-minus. The series 2010 bonds are special obligations of CHA backed by the full faith and credit of CHA.
The outlook is stable.
"The upgrade is due to recent changes in our criteria," said Standard & Poor's credit analyst Ki Beom K. Park.
The rating reflects CHA's strengths, including its: extremely strong overall management, as evidenced by its very strong enterprise and very strong financial profile scores, and a strategic plan that supports the authority's mission; very strong enterprise risk profile, as supported by low social rental house provided by CHA compared with market rental price, extremely strong management and strategic planning, improved asset quality and operating performance, and top-tier strong profitability amongst rated U.S. public housing authorities (PHAs); very strong financial risk profile, as evidenced by its stable net operating income and cash operation, extremely strong debt, and liquidity profile; very strong essentiality for CHA housing as demonstrated by a waiting list that well exceeds the number of applicants for public housing and housing choice vouchers; and strong development arm that maximizes external resources and has been successful in developing mixed-finance projects.
Partially offsetting these strengths are the following weaknesses: CHA's heavy reliance on government subsidies as a major source of income considering the risk of annual congressional appropriations for public housing subsidy; and recent significant reduction of federal funding streams, including the underfunding of federal operating fund subsidies and the decrease in federal capital fund grants.
CHA is the third-largest PHA in the country. At the end of fiscal year 2011, there were 18,325 public housing units under existing leases or available for occupancy and 37,681 housing choice vouchers throughout the city of Chicago.
