AK HFC's $110M Collat Bnds 1999 1st Ser Rtd `AAA' By Fitch IBCA.NEW YORK--(BUSINESS WIRE)--October 11, 1999-- Alaska Housing Finance Corp.'s (AHFC AHFC American Honda Finance Corporation AHFC Adaptive High Frequency Controller ) $110 million collateralized bonds, 1999 First Series (Veterans Mortgage Program) consisting of $46,095,000 Subseries A-1 and $63,905,000 Subseries A-2, are rated `AAA' by Fitch IBCA IBCA International Braille Chess Association IBCA Institute of Burial and Cremation Administration IBCA Integrated Business Communications Alliance IBCA International Barbeque Cookers Association IBCA Department of Interior Board of Contract Appeals . The bonds are scheduled to be sold competitively on Oct. 13, 1999. The bonds are being issued under a new master trust indenture. Bond proceeds will be used to continue the corporation's homebuyer mortgage program for qualified veterans. The bonds are secured by a pledge of trust assets, mortgage revenues, investment earnings, and reserves created by the indenture. The bonds are general obligations of the corporation and the state. The rating assigned to the bonds reflects the strong credit quality of the expected underlying collateral, the related reserves and credit enhancements, the adequacy of projected revenues to pay debt service, and the management capabilities and financial strength of the corporation. Although the bonds are general obligations of both the state and the corporation (each rated `AA' by Fitch IBCA), primary credit factors in the `AAA' rating assigned to the bonds center on the indenture's security provisions, the expected collateral pool of mortgage loans and/or guaranteed mortgage certificates Guaranteed Mortgage Certificates (GMC) First issued by Freddie Mac in 1975, G.M.C.s, like PCs, represent undivided interest in specified conventional whole loans and participations previously purchased by Freddie Mac. , the separately funded reserve account, and the availability of funds in the overcollateralization fund (OCR OCR in full optical character recognition Scanning and comparison technique intended to identify printed text or numerical data. It avoids the need to retype already printed material for data entry. fund). Both the reserve account and the OCR fund will be funded by a corporation contribution. Bond proceeds will be used to purchase $71 million of loans AHFC has warehoused for the program, as well as, provide lendable funds Lendable funds The pool of funds available to borrows; typically categorized by currency and maturity. for an additional $39 million of new, qualified loans. The loan program requires mortgages with loan-to-value ratios (LTVs) exceeding 80% to be guaranteed or insured by the Department of Veterans Affairs, the Federal Housing Administration Federal Housing Administration (FHA) Federally sponsored agency chartered in 1934 whose stock is currently owned by savings institutions across the United States. The agency buys residential mortgages that meet certain requirements, sells these mortgages in packages, and insures , or private mortgage insurers. About 80% of the warehoused loan portfolio consists of mortgages with primary mortgage insurance. The remainder have initial LTVs of 80% or less. The availability of the reserve account and OCR fund provide a significant layer of credit support, mitigating concerns of any cash flow disruptions and/or mortgage losses due to delinquencies and foreclosures. The overcollateralization requirements equal or exceed Fitch IBCA's `AAA' requirements. The OCR fund may consist of investment securities and/or additional mortgages. The reserve account is required to be funded at 2% of mortgages outstanding, excluding mortgages that are pooled into mortgage certificates guaranteed by Ginnie Mae Ginnie Mae: see Federal National Mortgage Association. , Fannie Mae Fannie Mae: see Federal National Mortgage Association. , or Freddie Mac. |
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