Standard & Poor's Ratings Services said it lowered its long-term rating on Chesterfield County Industrial Development Authority, Va.'s multifamily housing revenue bonds (Winchester Greens Townhouses) series 1999 to CCC from A-plus.
S&P also placed the rating on CreditWatch with negative implications.
"The downgrade and CreditWatch reflect the project's draw on its debt service reserve fund on July 1, 2014," said Standard & Poor's credit analyst Raymond Kim. "Based on our previous review in September 2013, the A-plus rating on the authority reflected the project's 1.78x debt service coverage for the 2012 fiscal year and similar coverage based on 2013 interim financial statements. Audited financial statements for 2013 also indicate debt service coverage of approximately 2x."
According to a notice from the trustee dated July 2, 2014, the Trustee drew $24,930.06 from the project's debt service reserve fund to fund the July 1, 2014, debt service payment, indicating insufficient deposits into the project's revenue fund for the period between Jan. 1, 2014, and June 30, 2014.
The trustee also reported that it will transfer funds from the project's revenue fund to the project's debt service reserve fund until the debt service reserve fund is replenished. If the project's debt service reserve fund is replenished, the agency will review the project's year-to-date financial performance for 2014 and update the rating accordingly.
The Winchester Greens Townhouses consists of 240 brick townhouse and garden-style apartment units. The amenities include a swimming pool, fitness center, clubhouse, and playground. The property is owned by Richmond Better Housing Coalition (RBHC), a 501C(3) not-for-profit corporation. RBHC was formed in 1988 to substantially increase affordable housing resources in the Richmond area.
