DALLAS - Standard & Poor's last week downgraded to default status $53.5 million of bonds issued by the Texas State Affordable Housing Corp. on behalf of the American Opportunity for Housing program, following the cancellation of an insurance policy on the debt and an insufficient debt service payment.

Analysts downgraded the long-term rating on the Series 2002A multifamily housing revenue bonds 18 notches from AA-minus - based on insurance from MBIA Insurance Corp. - to D because the March 4 debt service payment was about 30% short, constituting a default. Only $900,000 of the necessary $1.3 million was remitted, according to analysts. Standard & Poor's also suspended its C underling rating for the bonds after learning of the cancellation of the insurance policy.

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