Standard & Poor's Ratings Services lowered its long-term rating on Newnan Housing Authority, Ga.'s multifamily housing revenue bonds (Eastgate Apartments Project) series 2005 to BB-minus from BB.
"The downgrade reflects our view of insufficient coverage on the date of remarketing," said Standard & Poor's credit analyst Stephanie J. Morgan.
The rating reflects the following weaknesses: revenues from mortgage debt service payments and investment earnings are insufficient to pay full and timely debt service on the bonds plus fees by the remarketing date of Feb. 2025; asset/liability parity is projected to fall below 100% in Aug. 2015; insufficiency to pay reinvestment risk based on the 15-day minimum notice period required for special redemptions on Aug. 2015 in the event the security prepays; and a deficit is projected after reinvestment risk is paid in Aug. 2014.
Weaknesses are offset the following credit strengths: investments held in Federated Money Market Fund (AAAm); an asset-to-liability ratio of 100.29% as of July 10, 2012; and the high credit quality of the Fannie Mae guaranteed pass-through certificates, which Standard & Poor's considers to be AA-plus eligible.
Standard & Poor's has analyzed updated financial information based on oitscurrent stressed reinvestment rate assumptions for all scenarios as set forth in the criteria for certain federal government-enhanced housing transactions.