NEW YORK--(BUSINESS WIRE)--On the effective date of May 7, 2014, Fitch Ratings will confirm the short-term ratings of 'F1' assigned to the following $26,270,000 Utah Housing Corporation (UHC) single family mortgage class i variable rate bonds (VRBs, or the bonds) under the 2001 General Trust Indenture, consisting of:
--$5,030,000 2001 Series B;
--$4,825,000 2001 Series C;
--$5,695,000 2001 Series D;
--$4,185,000 2001 Series E;
--$6,535,000 2001 Series F.
The short-term rating action is in connection with the substitution of the liquidity support provided by Barclays Bank plc (rated 'A/F1', Stable Outlook) in the form of a Standby Bond Purchase Agreement (SBPA), with a substitute SBPA to be issued by JPMorgan Chase Bank, National Association (JPMorgan, rated 'A+/F1', Stable Outlook), effective May 7, 2014.
KEY RATING DRIVERS:
On the effective date, the short-term 'F1' ratings will be based on the liquidity support provided by JPMorgan, in the form of a substitute SBPA. The long-term 'AAA' ratings assigned to the bonds continue to be based on the ratings assigned to Utah Housing Corporation's class i variable rate bonds under the 2001 General Trust Indenture (rated 'AAA'). The Rating Outlook is Stable for the long-term rating.
The substitute SBPA provides for the payment of the total principal component of purchase price for all series plus an amount equal to 186 days of interest for each series calculated at a maximum rate of 12%, based on a year of 365 days. The principal and interest amount is available for tendered bonds during the daily and weekly rate modes in the event that the proceeds of a remarketing of the bonds are insufficient to pay the purchase price following an optional or mandatory tender. The substitute SBPA will expire on May 5, 2017, the stated expiration date, unless such date is extended; upon conversion of all series of bonds to an interest rate mode other than the daily or weekly rate mode; or upon the occurrence of certain other events of default which result in a mandatory tender or other termination events related to the credit of UHC's class i variable rate bonds under the 2001 General Trust Indenture which result in an automatic and immediate termination. The short-term 'F1' ratings will expire on the expiration or prior termination of the SBPA. The remarketing agent for the bonds is Barclays Capital Inc.
For more information on the long-term rating, see the press release dated March 14, 2013 'Fitch Affirms Utah Housing Corp's Single Family Bonds (2001 Indenture) Ratings; Outlook Stable', available on Fitch's website at www.fitchratings.com.
RATING SENSITIVITIES:
The short-term rating reflects the short-term rating that Fitch maintains on the bank providing liquidity support, and will be adjusted upward or downward in conjunction with the short-term rating of the bank and, in some cases, the long-term rating of UHC's class i variable rate bonds under the 2001 General Trust Indenture. The long-term rating is exclusively tied to the creditworthiness of UHC's class i variable rate bonds under the 2001 General Trust Indenture and will reflect all changes to that rating.
Additional information is available at www.fitchratings.com.
Applicable Criteria and Related Research:
--'U.S. Municipal Structured Finance Criteria', Feb. 24, 2014;
--'Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support', Jan. 27, 2014.
Applicable Criteria and Related Research:
Rating Guidelines for Variable-Rate Demand Obligations and Commercial Paper Issued with External Liquidity Support
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=730736
U.S. Municipal Structured Finance Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=736618
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