Moody's Assigns Aaa Rating to Illinois Housing Development Authority Multifamily Housing Revenue Notes

Strategic Insights -

Moody's Investors Service has assigned a credit enhanced rating of Aaa to the Illinois Housing Development Authority Multifamily Housing Revenue Floating Rate Notes, Series 2015, with a sale amount of $102,000,000, expected to be sold on April 30, 2015. The rating is based on the Direct-Pay Credit Enhancement Instrument provided by Fannie Mae to support the notes, the transaction's structure and legal protections, and Moody's evaluation of Fannie Mae's credit quality. Moody's currently rates Fannie Mae's long-term and short-term obligations as Aaa and P-1, respectively.

The Aaa rating is supported by the credit enhancement provided by Fannie Mae, which ensures timely payment of debt service and purchase price to noteholders. Moody's evaluation of Fannie Mae's credit quality is also a key factor in the rating assignment.

Key Takeaways:

  • The Aaa rating is based on the Direct-Pay Credit Enhancement Instrument provided by Fannie Mae.
  • The transaction's structure and legal protections provide for timely payment of debt service and purchase price to noteholders.
  • Moody's currently rates Fannie Mae's long-term and short-term obligations as Aaa and P-1, respectively.
  • The rating on the Notes would be downgraded if Moody's were to downgrade the long-term rating of Fannie Mae.
  • Underwriter Goldman, Sachs & Co. and Trustee Zions First National Bank are involved in the transaction.
  • The principal methodology used in this rating was "Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts" published in March 2015.

Statistics:

  • Sale amount: $102,000,000
  • Expected sale date: April 30, 2015
  • Rating description: Aaa, credit enhanced by Fannie Mae
  • Fannie Mae credit rating: Aaa (long-term) and P-1 (short-term)

Sources:

  • Moody's Investors Service press release on Illinois Housing Development Authority Multifamily Housing Revenue Notes, Series 2015
  • Moody's Investors Service (2015). "Rating Transactions Based on the Credit Substitution Approach: Letter of Credit-backed, Insured and Guaranteed Debts."