Fitch Affirms Wyoming Community Dev Auth SF Mtge Bonds (1978 Indenture) at 'AA+'; Outlook Stable

NEW YORK--()--Fitch Ratings affirms the rating on the following Wyoming Community Development Authority (CDA) single-family mortgage bonds (1978 Indenture):

--$9.545 million 2001 series A at 'AA+';
--$37 million 2002 series A at 'AA+'.

The Rating Outlook is Stable.

SECURITY

The bonds are special obligations of the authority and are secured by the single-family mortgages and cash and investments held under the resolution.

KEY RATING DRIVERS

STRONG PROGRAM OVERCOLLATERALIZATION: As of fiscal year (FY) 2013, the program had 205% asset parity which provides significant cushion for any potential losses within the program.

INDENTURE PROVISIONS: The Indenture allows for program assets to be withdrawn down to 100% asset parity.

SOUND LOAN PORTFOLIO: The underlying program loan portfolio is 77% federally insured by the following insurance providers: FHA (36%), RD (23%), and VA (18%). Additionally, the portfolio is performing adequately, as the delinquency rate (60+days) of the portfolio is 4.44%.

HIGH EXPOSURE TO VARIABLE RATE DEBT: Variable rate demand obligations (VRDOs) make up 100% of the bonds outstanding under this program and all of that debt is unhedged. All of the VRDOs are backed by one liquidity provider and are set to expire in October 2014.

STEPPED-RATE MORTGAGES: The underlying loan portfolio is comprised of approximately 46% stepped-rate mortgage loans which start at a rate of 2.5% and step to 4.5% over a 10-year period.

RATING SENSITIVITIES

WITHDRAWAL OF PROGRAM ASSETS: The program allows for assets to be withdrawn down to 100% asset parity. Although considered remote, any significant withdrawal of assets which decreases the asset parity to a level that is not adequate for its current rating would have a negative impact on the long-term rating of the bonds.

CREDIT PROFILE

As of Dec. 31, 2013, the underlying loan portfolio was federally insured by the following providers: FHA (36%), RD (23%), and VA (18%). In addition to federal insurance, the underlying loan portfolio is 12% insured by PMI providers and 9% insured by WCDA's Mortgage Guaranty Fund. The loan portfolio has performed adequately to date as the portfolio had a delinquency rate (60+ days) of 4.44%. Since inception in 1978, the program has only incurred $9.1 million in aggregate loan losses.

As of FY 2013, the program had a 205% asset parity ratio which provides significant cushion for any potential losses within the program. As of Dec. 31, 2013, the program had $46.6 million in outstanding bonds secured by approximately $65.6 million in mortgage loans and $40.3 million in cash and investments. All investments are in money market funds or various government securities. The strong level of overcollateralization provides strong support for the 'AA+' rating given the composition of the loan portfolio.

While this level of asset parity is consistent with higher rating levels, the Indenture allows for program assets to be withdrawn down to 100% asset parity. The authority intends to maintain its flexibility in regards to its legal ability to transfer funds out of the program and in December 2009 transferred $22 million in excess out of the Indenture. Given the indenture provisions of the program and its history of transfers, the program's characteristics are consistent with its 'AA+' long-term rating and Stable Outlook.

Additional information is available at www.fitchratings.com.

Applicable Criteria and Related Research:

--'State Housing Finance Agencies: Single Family Mortgage Program Rating Criteria', (July 25, 2013);
--'Revenue-Supported Rating Criteria', (June 03, 2013).

Applicable Criteria and Related Research:
State Housing Finance Agencies: Single-Family Mortgage Program Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=712476
Revenue-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=709499

Additional Disclosure
Solicitation Status
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Contacts

Fitch Ratings
Primary Analyst:
Ryan J. Pami, +1-212-908-0803
Analyst
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Maura McGuigan, +1-212-908-0591
Senior Director
or
Committee Chairperson:
Charles Giordano, +1-212-908-0607
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com

Sharing

Contacts

Fitch Ratings
Primary Analyst:
Ryan J. Pami, +1-212-908-0803
Analyst
Fitch Ratings, Inc.
One State Street Plaza
New York, NY 10004
or
Secondary Analyst:
Maura McGuigan, +1-212-908-0591
Senior Director
or
Committee Chairperson:
Charles Giordano, +1-212-908-0607
Senior Director
or
Media Relations:
Elizabeth Fogerty, +1-212-908-0526
elizabeth.fogerty@fitchratings.com