State revolving fund (SRF) and leveraged municipal loan pool (MLP) programs remain highly rated with strong performance, according to a Fitch Ratings report.
"The high ratings reflect the significant pledged program equity combined with repayments from a pool of pledged loans from high-quality governmental entities," said Major Parkhurst, director at Fitch Ratings.
Approximately 76% of the pooled bond programs are rated AAA by Fitch; all but one of which are traditional SRF programs. The remaining programs fall into the AA rating category and are predominately transportation or infrastructure MLPs.
Since Fitch's last peer review in 2013, minimum annual debt service coverage has increased slightly as many SRF programs continue to migrate from a reserve fund to a cash flow model-based structure as described within the report.
