Moody’s Investors Service said the upcoming redemption of Idaho housing bonds is a positive for investors.

The Idaho Housing and Finance Association announced last Thursday that it would redeem its first class of single-family mortgage revenue bonds issued in 1999 using money from its general fund.

Moody’s said the development will help the IHFA avoid future cash-flow shortfalls and a potential default on $1.3 million of bonds.

The bonds are rated A1 with a negative outlook.

“The action is a credit positive because it highlights IHFA’s willingness and ability to provide support for its program bonds even though it has no legal obligation or requirement to do so,” Moody’s said Tuesday.

The rating agency said if management had decided not to call the bonds, it would have expected IFHA’s asset-to-debt ratio to deteriorate further and the bonds to face elevated default risk.

Moody’s said several housing finance agencies have taken similar steps during the mortgage crisis.

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