Just ahead of the Fairfax County Redevelopment and Housing Agency’s competitive sale of $106 million of bond anticipation notes on Sept. 23, Moody’s Investors Service gave the deal its MIG-1 rating.
The current issue — Series 2008B affordable housing acquisition bonds — is tax-exempt and will renew a note originally issued in October 2007 for the acquisition of a 672-unit housing complex divided into three sites made up of apartment units in Annandale.
The redevelopment agency manages the property on behalf of Fairfax County, which is expected to transfer ownership of the improvements to the authority once it qualifies for federal housing programs. Ownership of the land will remain with the county.
While county managers say the government may pursue subdividing and selling portions of the project, they said over the long term it’s likely the county will continue to participate to some extent, Moody’s said. Following finalization of the plan, management expects to pursue long-term financing for 70% to 75% of the note issue in the spring, with the remainder permanently financed at an unspecified future date. In the event the long-term financing is not completed by maturity on Nov. 3, 2009, a renewal note is expected to be issued, Moody’s said.
Moody’s also affirmed the county’s Aaa long-term general obligation rating and stable outlook affecting about $2 billion of outstanding debt.
Analysts said the MIG-1 rating reflects Fairfax’s demonstrated market access and the superior underlying credit quality of the county, which has pledged its support for principal and interest, subject to appropriation.
The county’s economic importance in the national capital region, stable financial position supported by strong management practices, and low debt burden with manageable future borrowing plans contributed to the Aaa GO rating, Moody’s said.
Although not a frequent note issuer, the Redevelopment and Housing Agency received three bids on its most recent sale in January, nine bids on its October 2007 note sale, and 12 bids on a February 2007 sale, according to Moody’s.
Moody’s said the history of the issuer’s market access demonstrates an ability to refund the notes, if necessary, at their November 2009 maturity.
Standard & Poor’s and Fitch Ratings had not yet rated the notes.