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Moody's Investors Service Inc.

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

Strategic Insights

— 1 min read

Moody's Investors Service has assigned a Aa1/VMIG 1 rating to the proposed $15.208 million Indiana Housing and Community Development Authority Multifamily Housing Revenue Bonds (Flats on 14th Project), Series 2025. The rating reflects the strong structural framework and high credit quality of the investments securing the bonds, with expected revenues to fully cover bond debt service on each interest payment date. The short-term rating is based on cash flow projections demonstrating sufficient trustee-held monies for full and timely debt service payments until March 1, 2028. A reasoned bankruptcy opinion identifies mitigants to preference and automatic stay risks associated with a bankruptcy filing of the borrower and lenders contributing eligible funds.

Key Takeaways:

  • The Aa1 long-term rating is based on the strong structural framework and high credit quality of the investments securing the bonds, with expected revenues to fully cover bond debt service on each interest payment date.
  • The VMIG 1 short-term rating is based on cash flow projections demonstrating sufficient trustee-held monies for full and timely debt service payments until March 1, 2028.
  • The structural framework provides a closed system where bond proceeds will not be disbursed to the borrower, TWG Columbus, LP, unless an equal or greater amount is deposited to the collateral fund from disbursements of loan proceeds consisting of Eligible Funds.
  • A reasoned bankruptcy opinion identifies mitigants to preference and automatic stay risks associated with a bankruptcy filing of the borrower and lenders contributing eligible funds on the borrower's behalf.
  • The principal methodology used in these ratings was US Pre-refunded and Escrow-backed Transactions, published in October 2024.
  • Factors that could lead to an upgrade of the ratings include upgrade of Eligible Investments.
  • Factors that could lead to a downgrades of the ratings include downgrade of Eligible Investments or cash flow projections demonstrating revenue insufficiency.

Statistics:

  • $15.208 million: The proposed bond issuance amount.
  • Aa1/VMIG 1: The assigned rating to the Indiana Housing and Community Development Authority Multifamily Housing Revenue Bonds (Flats on 14th Project), Series 2025.
  • March 1, 2028: The expected mandatory tender date.

Sources:

  • Moody's Investors Service.
  • Moody's Ratings (Moody's)
  • US Pre-refunded and Escrow-backed Transactions, published in October 2024 (available at https://ratings.moodys.com/rmc-documents/430703)
  • Tiber Hudson LLC

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