Fitch Affirms Alaska Housing Finance Corp.'s Short Term Rating at 'F1+'

NEW YORK--(BUSINESS WIRE)--Fitch Ratings affirms the 'F1+' rating on Alaska Housing Finance Corporation's (AHFC or Corporation) short term general obligation (GO) on the following securities:

--The commercial paper program notes Series 2007

--Governmental Purpose Bonds, 1997 A and 2001 Series A and B

--State Capital Project Bonds, 2002 Series C

--Home Mortgage Revenue Bonds, 2009 Series A and B

Rating Rationale:

--Internal funds/cash reserves are well above 125% of outstanding short term debt held for:

1. The CP program to provide funds for the purchase and holding of mortgage loans pending transfer to one of the corporation's bond programs;

2. Variable rate demand bonds with weekly demand features for three bond indentures backed by the corporation's general obligation pledge (Affirmed Jan. 28, 2011 at "AA+" by Fitch).

The only exception to the "AA+" GO rating is the Governmental Purpose Bonds, 2001 Series A and B which are backed by the Corporation's GO pledge but affirm a long term rating of "AAA", with a Stable Outlook, due to the overcollateralization in the restricted equity account under the indenture.

Security:

Liquidity, provided by the unencumbered funds, is sufficient relative to the Corporation's overall operations. As of March 1, 2011, almost all of the $860 million in investments held in the general account are high quality, short term securities. The liquidity backup for the commercial paper and the other variable rate demand bonds with internal liquidity provided from the general account, monitored on a monthly basis, has consistently been greater than 125%.

Credit Summary:

The rating is based on a combination of several credit factors influencing the corporation's overall credit strength and specific procedures in place in the event of a failed remarketing. The corporation's housing finance bond portfolios are performing well, enhancing financial performance and limiting the likelihood of a potential drain on program surpluses or unrestricted assets.

Overall financial performance remains favorable. Alaska Housing's balance sheet is strong, as measured by an adjusted debt-to-equity ratio of 1.8:1, which consistently ranks the corporation as one of the lowest of 50 state housing finance agencies. Management has a stable track record. The continued cooperation from state government officials recognizes the importance of maintaining the financial strength of the corporation.

Additional information is available at 'www.fitchratings.com'.

Applicable Criteria and Related Research:

--'Criteria for Assigning Short-Term Ratings Based on Internal Liquidity' (Dec. 29, 2009);

--'State Housing Finance Agencies General Obligation Rating Criteria' (April 29, 2009);

--'Revenue-Supported Rating Criteria' (Oct. 8, 2010).

Applicable Criteria and Related Research:

Criteria for Assigning Short-Term Ratings Based on Internal Liquidity

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=493176

State Housing Finance Agencies General Obligation Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=431758

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=564565

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