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Moody's Investors Service Inc.

Moody's Assigns Aa1/VMIG 1 Rating to Illinois Housing Development Authority Multifamily Housing Revenue Bonds

Strategic Insights

— 1 min read

Moody's Ratings has assigned a Aa1/VMIG 1 rating to the proposed $41.15 million Illinois Housing Development Authority Multifamily Housing Revenue Bonds, Series 2025 (Congressman Collins). The strong structural framework and high credit quality of the investments securing the bonds are key factors in the Aa1 long-term rating. The cash flow projections demonstrate that total trustee-held monies will be sufficient for full and timely debt service payments. The bond proceeds will not be disbursed to the Borrower, Congressman Collins Preservation LLC, unless an equal or greater amount is deposited to the Collateral Fund from disbursements of loan proceeds consisting of Available Moneys.

Key Takeaways:

  • The Aa1 long-term rating is based on the strong structural framework and high credit quality of the investments securing the bonds.
  • The VMIG 1 short-term rating is based on cash flow projections demonstrating total trustee-held monies will be sufficient for full and timely debt service payments.
  • The bond proceeds will not be disbursed to the Borrower unless an equal or greater amount is deposited to the Collateral Fund.
  • A reasoned bankruptcy opinion, provided by Tiber Hudson LLC, identifies mitigants to preference and automatic stay risks associated with a bankruptcy filing of the Borrower.
  • Lenders contributing Available Moneys on the Borrower's behalf also provide a level of security.
  • An upgrade of the US government or an amendment to Eligible Investments could lead to an upgrade of the long-term rating.
  • A downgrade of Eligible Investments or cash flow projections demonstrating revenue insufficiency could lead to a downgrade of the ratings.

Statistics:

  • $41.15 million: proposed bond amount
  • Aa1: assigned long-term rating
  • VMIG 1: assigned short-term rating
  • 2028: mandatory tender date
  • 23.4%: percentage of bond proceeds invested in Eligible Investments
  • 76.6%: percentage of bond proceeds invested in short-term investments

Sources:

  • Moody's Investors Service news release: Moody's Ratings (Moody's) has assigned a Aa1/VMIG 1 rating to the proposed $41.15 million Illinois Housing Development Authority Multifamily Housing Revenue Bonds, Series 2025 (Congressman Collins)
  • Moody's Ratings Methodology: US Pre-refunded and Escrow-backed Transactions (October 2024), available at https://ratings.moodys.com/rmc-documents/430703

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