Fitch Affirms NYCHA's $19MM Multi-Family Ref Bonds 1997 Series A at 'A+'.Business Editors NEW YORK--(BUSINESS WIRE)--Nov. 19, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms its 'A+' rating on the New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. Housing Authority's (NYCHA NYCHA New York City Housing Authority or the authority) approximately $19 million outstanding mortgage revenue bonds, 1997 series A. The 1997 bonds refunded outstanding bonds issued in 1978 used to construct three separate developments. The affirmation reflects the adequacy of projected net rental revenue stemming from the availability of Housing Assistance Payment (HAP HAP. An old word which signifies to catch; as, "to hap the rent," to hap the deed poll." Techn. Dict. h.t. ) contracts for 100% of the developments' rental units. The three developments are cross collateralized. Debt service coverage (DSC (1) (Digital Signal Controller) A microcontroller and DSP combined on the same chip. It adds the interrupt-driven capabilities normally associated with a microcontroller to a DSP, which typically functions as a continuous process. See microcontroller and DSP. ) decreased in 2002 to 1.15 times (x) for the first time compared with 1.48x in 2001 and 1.34 in 2000. Projections for 2003 have DSC increasing to 1.37x, partially due to a rent increase at one of the developments as well as an increase in investment income. Fitch performed a site inspection of the three developments. The inspection confirmed that the developments are well maintained and operated. The developments total 727 combined rental units at three sites - one in Manhattan, one in the Bronx and an elderly development in Brooklyn. The federal Section 8 subsidy program lends a degree of predictability to the projected revenue flow and resultant debt service coverage. The Section 8 program limits the subsidy payment for temporarily vacant units, and the U.S. Department of Housing and Urban Development (HUD Hud (h  d), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. ) may reduce the total number of subsidized units as a result of extended high vacancy rates or noncompliance noncompliancefailure of the owner to follow instructions, particularly in administering medication as prescribed; a cause of a less than expected response to treatment. noncompliance with HUD standards. However, NYCHA's experience with HUD housing programs, particularly the 25 year history of managing these developments and the steady demand for affordable housing in New York City, mitigate occupancy and noncompliance concerns. Current occupancy levels remain over 95%. The HAP contracts, with renewals at NYCHA's option, expire with the term of the bonds maturity date. Credit concerns center on the limited expected rent increases and the ability of NYCHA to contain future costs of operation. |
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