Moody's Public Finance Department Rating News; MOODY'S REVISES RATING ON THE VIRGINIA HOUSING DEVELOPMENT AUTHORITY'S COMMONWEALTH MORTGAGE BOND PROGRAM TO Aa1 FROM Aa

Business Wire, Nov 10, 1994

NEW YORK--(BUSINESS WIRE)--Nov. 10, 1994-- Effective today, Moody's Investors Service has revised the rating on the Virginia Housing Development Authority's Commonwealth Mortgage Bond program to Aa1 from Aa.

The upgrade is being done in conjunction with the sale of $41.1 million Commonwealth Mortgage Bonds, 1994 Series I-AMT, Subseries I-3, and $36.7 million 1994 Series J-3 bonds. The rating revision is a result of the following credit considerations, which combine to provide exceptionally high quality bondholder security.

o The program's fund balance continues to reflect healthy annual increases, with the June 30, 1994 audited financial statements indicating a fund balance of $190 million, or 7.8% of bonds outstanding. This translates to a program asset-to-debt ratio of 1.087.

o Mortgage insurance provisions are strong with 58% of the loan portfolio insured by FHA and another 25% guaranteed by VA and FmHA. The high quality primary mortgage insurance provides security against significant uninsured losses in the event of loan defaults and mitigates concern over the program's lack of pool policy.

o The continued favorable performance of the underlying loans enhances liquidity and reduces the likelihood of cash flow disruption from nonperforming assets.

o VHDA's general obligation pledge to the bonds adds further security. The authority's Aa general obligation rating reflects highly sophisticated management and program oversight, continued overall financial strength, and the exceptional performance of its bond programs to date.

CONTACT: Margaret Casey, Assistant Vice President, 212/553-4185

                            or
             Kelly A. O'Brien, Analyst, 212/553-4456