NEW YORK--(BUSINESS WIRE)--Fitch assigns a rating of 'AA' to the Vermont Housing Finance Agency's (the agency) $30.3 million multiple purpose fixed-rate bonds 2008 series C-1. The bonds are expected to sell this week and, together with the 2008 series C-2 bonds, comprise the fourth issuance under a flexible general trust indenture dated July 1, 2007. The 2008 series C-1 and C-2 bonds are expected to close on Sept. 24, 2008 and are on parity with existing obligations under the indenture. Fitch expects to assign a rating to the 2008 series C-2 variable-rate bonds closer to closing.The 2008 series C-1 bond proceeds will be made available to finance the purchase or improvement of single-family housing located in Vermont. The long-term 'AA' rating reflects the sound credit quality of the indenture's loan portfolio, the projected overcollateralization (OC) of the existing obligations under the indenture, cash flow surpluses sufficient to offset potential cash flow interruptions from future loan payment delinquencies, adequate legal provisions of the resolution, the agency's capable programmatic oversight, and the agency's general obligation pledge.
Credit concerns center on:
--Potential changes to the credit quality of the mortgage insurance providers that support the privately-insured loans, particularly given the portfolio's concentration with one provider;
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