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Moody's Investors Service Inc.

Moody's Assigns Aa1/VMIG 1 Rating to North Dakota Housing Finance Agency Multifamily Housing Revenue Bonds

Strategic Insights

— 2 min read

The North Dakota Housing Finance Agency has proposed the issuance of $9.5 million in North Dakota Housing Finance Agency Multifamily Housing Revenue Bonds (Pleasant Valley Apartments) Series 2025, which has been assigned an Aa1/VMIG 1 rating by Moody's Investors Service. The rating is based on the strong structural framework and the high credit quality of the investments securing the bonds, with cash flow projections indicating sufficient funds for full and timely debt service payments. The VMIG 1 short-term rating is supported by the closed system, where bond proceeds will not be disbursed unless an equal or greater amount is deposited to the Collateral Fund.

Key Takeaways:

  • The Aa1 long-term rating is based on the strong structural framework and the high credit quality of the investments securing the bonds.
  • The rating is supported by cash flow projections indicating sufficient funds for full and timely debt service payments.
  • The VMIG 1 short-term rating is based on cash flow projections demonstrating that total trustee-held monies in the Bond Fund, Project Fund, and Collateral Fund will be sufficient for full and timely debt service payments.
  • The closed system provides for a secure transaction structure, where bond proceeds will not be disbursed 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.
  • The principal methodology used in the ratings was US Pre-refunded and Escrow-backed Transactions, published in October 2024.
  • The transaction provides for a high level of credit enhancement, with a strong structural framework and a high-quality investment portfolio.
  • The Aa1/VMIG 1 rating reflects Moody's expectations of stable credit-worthiness of the investment portfolio.

Statistics:

  • $9.5 million: The proposed amount of North Dakota Housing Finance Agency Multifamily Housing Revenue Bonds (Pleasant Valley Apartments) Series 2025.
  • Aa1: The long-term rating assigned by Moody's Investors Service.
  • VMIG 1: The short-term rating assigned by Moody's Investors Service.
  • February 1, 2028: The expected mandatory tender date.
  • 2024: The year in which the US Pre-refunded and Escrow-backed Transactions methodology was published.

Sources:

  • Moody's Investors Service, [Ratings for North Dakota Housing Finance Agency Multifamily Housing Revenue Bonds (Pleasant Valley Apartments) Series 2025] (2025).
  • Tiber Hudson LLC, [Reasoned Bankruptcy Opinion for North Dakota Housing Finance Agency Multifamily Housing Revenue Bonds (Pleasant Valley Apartments) Series 2025] (2025).
  • Moody's Investors Service, [US Pre-refunded and Escrow-backed Transactions] (October 2024).

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