Fitch Affirms Michigan Finance Authority's SRF Bonds at 'AAA'; Outlook Stable

AUSTIN, Texas--(BUSINESS WIRE)--Fitch Ratings has affirmed its 'AAA' rating on the following Michigan Finance Authority's (MFA) state revolving fund (SRF) bonds:

--Approximately $1.73 billion in outstanding clean water and drinking water revolving fund revenue bonds.

The Rating Outlook is Stable.

In accordance with Fitch's newly released 'State Revolving Fund and Leveraged Municipal Loan Pool Criteria', Fitch's cash flow modeling demonstrates that the program can continue to pay bond debt service even with loan defaults in excess of Fitch's 'AAA' liability default hurdle, as produced using Fitch's Portfolio Stress Calculator (PSC). Liability default hurdles derived by the PSC are calculated based on overall pool credit quality as measured by the rating of underlying borrowers, size, loan term, and concentration.

For more information, see 'Fitch Rates Michigan Finance Authority's SRF Bonds 'AAA'; Outlook Stable', dated April 5, 2012.

Additional information is available at 'www.fitchratings.com'.The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Applicable Criteria and Related Research:

--Revenue-Supported Rating Criteria (June 12, 2012);

--State Revolving Fund and Leveraged Municipal Loan Pool Criteria (May 21, 2012);

--Rating Guidelines for State Credit Enhancement Programs (June 19, 2012);

--Counterparty Criteria for Structured Finance Transactions (May 30, 2012).

Applicable Criteria and Related Research:

Counterparty Criteria for Structured Finance Transactions

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=678938

Rating Guidelines for State Credit Enhancement Programs

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681239

State Revolving Fund and Leveraged Municipal Loan Pool Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=677858

Revenue-Supported Rating Criteria

http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=681015

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