Fitch Affirms New Mexico Finance Authority PPRF Senior Revs at 'AA', Sub Revs at 'AA-'.CHICAGO -- Fitch Ratings has affirmed the 'AA' rating on the New Mexico Finance Authority's (NMFA NMFA National Military Family Association NMFA National Master Freight Agreement ) $622.7 million outstanding senior lien public project revolving fund (PPRF PPRF Patient Privacy Rights Foundation ) revenue bonds. Fitch has also affirmed and removed from Rating Watch Negative the 'AA-' rating on the NMFA's $381.4 million outstanding subordinate lien PPRF revenue bonds. The Rating Outlook is Stable. The removal from Rating Watch Negative reflects Fitch's assessment of the subordinate lien program's ability to continue making its debt service payments, under severe loan repayment default scenarios, even without use of the debt service reserve fund surety bonds from MBIA MBIA Montana Building Industry Association MBIA Municipal Bond Insurance Association MBIA Michigan Boating Industries Association MBIA Municipal Bond Investors Assurance MBIA Massachusetts Brain Injury Association MBIA Maryland Business Incubation Association Insurance Corp. (MBIA) and Ambac Assurance Corp. (Ambac) totaling $35.7 million. The ratings on the NMFA's PPRF bonds are based on the authority's continuing record of conservative loan underwriting criteria, the stability and strong coverage of loan repayment and governmental gross receipts tax A gross receipts tax, sometimes referred to as a gross excise tax, is a tax on the total gross revenues of a company, regardless of their source. It is similar to a sales tax, but it is levied on the seller of goods or services rather than the consumer. (GGRT GGRT Galloping Goose Rail Trail ) revenue securing the bonds, the diversification of the loan portfolios and the sound management of PPRF loan programs. The senior bonds are secured by municipal and state agency loan repayments, as well as NMFA's 75% share of New Mexico GGRT revenues. Pledged loan repayments and GGRT revenue currently provide 1.34 times (x) maximum annual debt service (MADS) coverage for the senior lien PPRF bonds. The subordinate lien bonds are secured by repayments from their separate loan portfolios, the excess cash flows from the senior lien bonds and repayments from a smaller portfolio of direct loans. This cash flow stream currently provides a minimum of 1.68x MADS coverage on the subordinate bonds, although coverage is expected to decline with future debt issuance. Proceeds from both senior and subordinate bonds are made to local governments throughout the state of New Mexico, many of which are small and do not have public credit ratings. To date, however, there have been no uncured defaults by any of the borrowers in the NMFA's loan portfolios. Both the senior and subordinate liens are subject to an additional bonds test Additional bonds test A test for ensuring that bond issuers can meet the debt service requirements of issuing any new additional bonds. additional bonds test that conservatively discounts historical GGRT receipts and projected pledged revenues based on the credit quality of the loans; this provides protection against the programs becoming overleveraged. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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