Moody's Assigns Aa1/VMIG 1 Rating to Louisiana Housing Corporation Multifamily Housing Revenue Bonds

Strategic Insights -

Moody's Investors Service has assigned a Aa1/VMIG 1 rating to the proposed $18 million Louisiana Housing Corporation Multifamily Housing Revenue Bonds (Capstone at Covington Place Project) Series 2025. The strong structural framework and high credit quality of the investments securing the bonds support the Aa1 long-term rating. The short-term rating is based on cash flow projections that demonstrate sufficient monies to cover bond debt service payments.

Key Takeaways:

  • The rating is based on the strong structural framework and high credit quality of the investments securing the bonds.
  • The Aa1 long-term rating is assigned due to the expectation that monies on deposit with the Trustee will be invested in Eligible Investments generating revenues to cover bond debt service on each interest payment date.
  • The VMIG 1 short-term rating is based on cash flow projections demonstrating sufficient monies to cover bond debt service payments.
  • The structural framework provides for a closed system, preventing bond proceeds from being disbursed to the borrower unless an equal or greater amount is deposited to the Collateral Fund.
  • A reasoned bankruptcy opinion identifies mitigants to preference and automatic stay risks associated with a bankruptcy filing of the borrower.
  • Factors that could lead to an upgrade of the ratings include an upgrade of Eligible Investments for the long-term rating.
  • Factors that could lead to a downgrade of the ratings include a downgrade of Eligible Investments for the long-term rating and cash flow projections demonstrating revenue insufficiency for the short-term rating.

Statistics:

  • $18 million: The proposed size of the Louisiana Housing Corporation Multifamily Housing Revenue Bonds (Capstone at Covington Place Project) Series 2025.
  • Aa1/VMIG 1: The rating assigned by Moody's to the proposed bonds.
  • Refunded and Escrow-backed Transactions: The principal methodology used in these ratings, published in October 2024.
  • February 1, 2028: The mandatory tender date, currently expected.

Sources:

  • Moody's Investors Service. (n.d.). Moody's Ratings (Moody's) has assigned a Aa1/VMIG 1 rating to the proposed $18 million Louisiana Housing Corporation Multifamily Housing Revenue Bonds (Capstone at Covington Place Project) Series 2025.
  • Rating Methodologies page on https://ratings.moodys.com.