NEW YORK - Standard & Poor's Ratings Services said it lowered its rating on Austin Housing Finance Corp., Texas' single-family mortgage revenue refunding bonds series 1997A-1 and 1997A-2 19 notches to CC from AAA.
"The downgrade reflects what we consider to be insufficient assets available to pay full debt service to the bondholders," said Standard & Poor's credit analyst Renee Berson.
As of Feb. 18, the project's asset-to-liability position was 98.82%.
The Jan. 1, debt service was paid to all bondholders.
Total assets of $1.201 million as of Feb. 18, consisted of $1.194 million in mortgage-backed securities, a redemption fund of $31.43, a revenue fund of $4,697, and accrued interest on the mortgage-backed securities of $3,191. Outstanding liabilities of $1.204 million consist of $625,000 and $575,000 term bonds earning 6.55% and 6.15%, respectively plus accrued interest of $3,603, resulting in an asset-to-liability ratio of 98.82%. All funds are invested in AAAm-rated JPMorgan US Treasury money market fund. The mortgage-backed securities have a weighted average pass-through rate of 6.416%.
The trustee, Bank of New York Mellon Trust Co. N.A., is aware that the bonds are not in parity and will not collect or pay the issuer fees until bonds are in parity again. If all mortgage-backed securities prepay prior to the issue reaching parity, Standard & Poor's believes there will be insufficient funds available to pay full principal and interest on the bonds.
