Fitch Places Idaho HFA's 2006 Indenture Class I and II Bonds on Rating Watch Negative

NEW YORK--()--Fitch Ratings places the following Idaho Housing Finance Association (IHFA) single-family mortgage bonds (2006 Indenture) on Rating Watch Negative:

--$344.9 million IHFA single-family mortgage (2006 Indenture) class I bonds currently rated 'AAA';

--$9.3 million IHFA single-family mortgage (2006 Indenture) class II bonds currently rated 'AA'.

SECURITY

The single-family mortgage bonds are issued under a master indenture that pledges revenues, investment earnings, reserves, and other trust funds to secure the bonds. The class I and II bonds have asset parity maintenance requirements directing revenues to be used to call bonds of those classes respectively prior to paying debt service of the next junior class.

CREDIT PROFILE

The Rating Watch Negative reflects certain Class I and II bond series' asset parity ratios falling below minimum indenture requirements. IHFA management is aware of the issue and reports that this problem will be addressed in the coming months. Historically, IHFA has experienced similar asset parity issues in other indentures and has resolved the issue by restoring the bonds to the minimum asset parity requirements.

The Rating Negative Watch will be resolved once management implements a plan to restore asset parity levels to the minimum indenture requirements. Should management fail to restore the bonds to the minimum asset parity levels in the coming months as required by the respective series indentures, Fitch is likely to downgrade the ratings to reflect current asset parity levels. Additionally, as the percentage of class I and II bonds continues to grow relative to total bonds outstanding, the debt subordination structure provides less security moving forward, which could result in a downgrade of the class I and II bonds.

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

Applicable Criteria

Revenue-Supported Rating Criteria (pub. 16 Jun 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=750012

State Housing Financing Agencies: Single Family Housing Criteria (pub. 01 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867779

Additional Disclosures

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=992728

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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Contacts

Fitch Ratings
Primary Analyst
Ryan J. Pami
Associate Director
+1-212-908-0803
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Charles Giordano
Senior Director
+1-212-908-0607
or
Committee Chairperson
Maura McGuigan
Senior Director
+1-212-908-0591
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com

Contacts

Fitch Ratings
Primary Analyst
Ryan J. Pami
Associate Director
+1-212-908-0803
Fitch Ratings, Inc.
33 Whitehall Street
New York, NY 10004
or
Secondary Analyst
Charles Giordano
Senior Director
+1-212-908-0607
or
Committee Chairperson
Maura McGuigan
Senior Director
+1-212-908-0591
or
Media Relations
Sandro Scenga, +1 212-908-0278
sandro.scenga@fitchratings.com