The Montana Board of Housing on Monday received an Aa1 rating and stable outlook from Moody's Investors Service ahead of plans on Aug. 19 to price $50 million in single family program bonds.

Moody's also affirmed the Aa1 rating on $109 million of parity bonds with a stable outlook, according to the ratings report.

MBOH will price the bonds in two series splitting the bonds in roughly equal amounts of $25 million.

The 2013 series B bonds will be issued under a 1979 indenture.

The Aa1 rating reflects the strong program balance sheet position, the existing and expected loan composition, and the bond structure, according to Moody's analysts.

The strengths listed by Moody's analysts include: a solid program asset-to-debt ratio as of June 30, 2012 of 1.38 times, debt service reserves in an amount equal to maximum annual debt service and a mortgage reserve fund equal to 1% of the outstanding mortgage principal; and strong loan portfolio characteristics including government mortgage insurance, low delinquency rates, and well-seasoned vintages.

The challenges are that the program has experienced operating losses, but this is mitigated by the strong balance sheet position.

The stable outlook is based upon healthy program asset-to-debt ratio and a strong mortgage portfolio composition.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.