CREDIT ENHANCEMENT AGREEMENT PROVIDED BY FREDDIE MAC
Hillsborough Co. Housing Finance Auth., FL
Multifamily Mortgage Revenue Bonds (Special Program) Series 2009C (The Ella at Encore)
Expected Sale Date
Freddie Mac CEA
NEW YORK, Aug 30, 2011 -- Moody's Investors Service has assigned the rating of Aaa to the
$2,900,000 Housing Finance Authority of Hillsborough County, Florida
Multifamily Mortgage Revenue Bonds (Special Program) Series 2009 C (The Ella at
Encore) (the Bonds) that are being issued to finance a multifamily rental
housing development located in Tampa, Florida and known as The Ella at Encore.
The rating is based upon the Credit Enhancement Agreement (CEA or
Credit Facility) provided by the Federal Home Loan Mortgage Corporation
(Freddie Mac or the Bank), the structure of the transaction which ensures the
timely payment of principal and interest to investors; and Moody's evaluation of
the creditworthiness of Freddie Mac. Freddie Mac is rated Aaa by Moody's.
The highest quality security for the Bonds is derived from Freddie
Mac's obligations under the CEA pursuant to which Freddie Mac will pay to
the trustee, when due, an amount equal to the principal and interest owed by the
borrower under the Bond Mortgage Note (whether by reason of regularly scheduled
monthly payments, upon optional or mandatory prepayment of the bond mortgage
loan, or upon maturity or acceleration of the bond mortgage note). Moody's has
reviewed the transaction structure to confirm that payments due under the Bond
Mortgage Note correspond to payments due on the Bonds.
Under the Bond Mortgage Note, the borrower is obligated to pay principal and
interest on the mortgage in the same amounts and on the same dates as payments
are due on the Bonds. When the Bonds are subject to optional or mandatory
redemption, the bond mortgage note is subject to optional or mandatory
prepayment under the same conditions, at the same prepayment prices, and on the
same dates as the Bonds.
DESCRIPTION OF THE BONDS
The Bonds will bear interest in the fixed rate mode and pay interest
semi-annually with interest commencing January 1, 2012 and on each January
1st and July 1st, thereafter.
Funds for the payment of principal and interest shall be paid from the following
sources in the following order of priority: (1) moneys drawn under the Credit
Facility; and (2) available moneys.
THE CREDIT FACILITY
The Credit Facility, which is sized for full principal plus 189 days of interest
at the applicable interest rate on the Bonds.
The Credit Facility is to be drawn upon by the trustee to make timely payments
of principal and interest. Conforming draws received by the bank by 12:00 noon,
Eastern Standard Time (EST), will be honored by 2:00 p.m., EST, on the next
REINSTATEMENT OF INTEREST DRAWS
Draws for interest on the Credit Facility will be automatically
reinstated immediately following such draw.
REIMBURSEMENT AGREEMENT DEFAULTS
Upon an event of default under the Reimbursement Agreement Freddie Mac may, at
its option, send written notice to the trustee stating that an event of default
under the Reimbursement Agreement has occurred, directing either mandatory
redemption or acceleration of the Bonds. Upon receipt of such notice with
direction to redeem the Bonds, the trustee shall immediately declare the
principal and interest on the Bonds immediately due and payable, cause a
redemption to occur on the earliest practicable date and interest shall cease to
accrue on such redemption date. Upon receipt of such notice with direction
to accelerate the Bonds, the trustee shall declare the principal and interest on
the Bonds immediately due and payable and interest shall cease to accrue
immediately upon such declaration.
EVENTS OF DEFAULT RELATED TO PAYMENT UNDER THE TRUST INDENTURE
The failure by the Trustee to make a required payment to the bondholders when
due shall constitute an Event of Default under the Trust Indenture. Following
default and the written direction by Freddie Mac, the Trustee shall declare the
principal and interest accrued on all of the Bonds immediately due and payable.
EXPIRATION / TERMINATION OF THE CREDIT FACILITY
The Credit Facility shall automatically terminate upon the earliest to occur of:
(i) the Bonds are paid in full, (ii) the date the Bonds are redeemed in whole or
purchased in lieu of such redemption in whole and such related draw has been
honored in accordance with the terms of the Credit Facility, (iii) stated
expiration date, January 6, 2044, and (iv) the date on which the Bank receives a
notice from the Trustee to the effect that no Bonds remain outstanding and
has released Freddie Mac from the lien of the Indenture.
Substitution of the Credit Facility is not permitted.
The Bonds are subject to mandatory redemption:
(i) in whole or in part at par at the direction of the Bank in an amount equal
to net proceeds from insurance or condemnation award; (ii) in whole or in part
at the direction of the Bank to the trustee following and event of default under
the Reimbursement Agreement, or any other bond mortgage loan document; (iii) in
whole on a business day which is no less than 5 days prior to the expiration of
the Credit Facility; (iv) on each applicable mandatory sinking fund redemption
date; (v) At the direction of the CEA provider as a result of Borrower Loan
Payments; and (vi) Forward Commitment Maturity Date at the written direction
of the Credit Provider.
The principal methodology used in rating the Bonds was Moody's
Rating Methodology For Multifamily Housing Bonds Secured By Freddie Mac
Direct-Pay Credit Enhancement Agreement, rating methodology published in
January 2006. Other methodologies and factors that may have been considered in
the process of rating this issuer can also be found on Moody's website.
For ratings issued on a program, series or category/class of debt, this
announcement provides relevant regulatory disclosures in relation to each rating
of a subsequently issued bond or note of the same series or category/class of
debt or pursuant to a program for which the ratings are derived exclusively from
existing ratings in accordance with Moody's rating practices. For ratings issued
on a support provider, this announcement provides relevant regulatory
disclosures in relation to the rating action on the support provider and in
relation to each particular rating action for securities that derive their
credit ratings from the support provider's credit rating. For provisional
ratings, this announcement provides relevant regulatory disclosures in
relation to the provisional rating assigned, and in relation to a
definitive rating that may be assigned subsequent to the final issuance of the
debt, in each case where the transaction structure and terms have not
changed prior to the assignment of the definitive rating in a manner that
would have affected the rating. For further information please see the ratings
tab on the issuer/entity page for the respective issuer on www.moodys.com.
Information sources used to prepare the credit rating are the following: parties
involved in the ratings and public information.
Moody's considers the quality of information available on the rated
entity, obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.
Please see Moody's Rating Symbols and Definitions on the Rating Process page on www.moodys.com for further information on the meaning of each rating category and the definition of default and recovery.
Please see ratings tab on the issuer/entity page on www.moodys.com for the last rating action and the rating history.
The date on which some ratings were first released goes back to a time before Moody's ratings were fully digitized and accurate data may not be available. Consequently, Moody's provides a date that it believes is the most reliable and accurate based on the information that is available to it. Please see the ratings disclosure page on our website www.moodys.com for further information.
Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.
David A. Parsons
Public Finance Group
Moody's Investors Service
Ferdinand S. Perrault
Public Finance Group
Moody's Investors Service
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
MOODY'S ASSIGNS THE RATING OF Aaa TO THE HOUSING FINANCE AUTHORITY OF HILLSBOROUGH COUNTY, FLORIDA MULTIFAMILY MORTGAGE REVENUE BONDS (SPECIAL PROGRAM) SERIES 2009 C (THE ELLA AT ENCORE)
Moody's Investors Service, Inc.
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New York, NY 10007