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08 Jul 2011
Florida Housing Finance Corporation
NEW YORK, Jul 8, 2011 -- Moody's Investors Service has downgraded the rating on Florida Housing Finance
Corporation Housing Revenue Bonds, 1999 Series J-1 & J-2 (Raceway Pointe
Apartments) to Ba2 from Ba1. The rating outlook on the bonds remains negative.
The 1999 Series J-1 & J-2 bonds continue to be insured by MBIA.
The long-term Ba2 rating reflects the project's declining debt service coverage
ratio ranging from 1.17 to 1.06 per December 31, 2010 audited financial
statements as well as increased operations expenses. The previous rating action
was a downgrade to Ba1 from Baa3 with a negative outlook on June 10, 2010. The
outlook remains negative and is a reflection of the continuing trend of
declining debt service coverage , increased expenses and the continuing
necessity to offer deep concessions to maintain high occupancy as illustrated
by the past years financial performance of the project. Moody's expects that the
project will continue to offer such concessions to maintain high occupancy
levels, thus maintaining rental revenues. While debt service coverage is lower
than original projections, Raceway Pointe continues to benefit as a recipient of
Low Income Housing Tax Credits (LIHTC), which Moody's recognizes as a credit
strength, given the additional layers of oversight and asset management.
The bonds are secured by revenues derived from operations of the Raceway Pointe
Apartments Project, a 200 unit affordable apartment complex in Volusia County,
Florida, as well as any other funds pledged to bondholders under the indenture.
* While the property has experienced a decline in debt service
coverage, management reports that the property is currently 94%
* The project is a recipient of Low Income Housing Tax Credits (LIHTC), which
Moody's recognizes as a credit strength, given the additional layers of
oversight and asset management
* Further bondholder security is provided by experienced property management;
Concord Management, Ltd., a subsidiary of the owner CED, over 12,500 units under
management in Florida, Georgia, Illinois, Michigan, NY, North Carolina, South
Carolina, Ohio, Texas, and Tennessee. Concord Management, Ltd., a subsidiary of
the owner CED, is the manager for this property. Moody's believes that
Concord has provided sound property management on this and other rated
affordable properties in the past. Concord's ability to control future
expenses and economic vacancy will be an important factor in maintaining
adequate financial performance.
* Operational expenses continue to increase, exerting negative pressure on net
operating income (NOI).
* This project is subject to real estate risks and market competition; however,
these risks are mitigated somewhat by the project's relatively new construction
and the additional security provided by LIHTC.
The outlook remains negative based on the projects declining debt
service coverage resulting from increased operating expenses. Moody's
will continue to monitor the property's monthly occupancy rates, expenses, and
debt service coverage closely.
The principal methodology used in this rating was Global Housing
Projects published in July 2010. Please see the Credit Policy page on
www.moodys.com for a copy of this methodology .
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 rating are the following: parties
involved in the ratings.
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 credit 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 ratings tab on the issuer/entity page on Moodys.com for the last rating action and the rating history.
The date on which some Credit Ratings were first released goes back to a time before Moody's Investors Service's Credit Ratings were fully digitized and accurate data may not be available. Consequently, Moody's Investors Service 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 the Credit Policy page on Moodys.com for the methodologies used in determining ratings, further information on the meaning of each rating category and the definition of default and recovery.
Ferdinand S. Perrault
Public Finance Group
Moody's Investors Service
Public Finance Group
Moody's Investors Service
Journalists: (212) 553-0376
Research Clients: (212) 553-1653
MOODY'S DOWNGRADES TO Ba2 FROM Ba1 THE RATING FOR FLORIDA HOUSING FINANCE CORPORATION HOUSING REVENUE BONDS, 1999 SERIES J-1 & J-2 (RACEWAY POINTE APARTMENTS); OUTLOOK REMAINS NEGATIVE
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
No Related Data.
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