Fitch Rates Alaska Housing's $127.2MM Housing Development Bonds 2004 A-C 'AA+'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Feb. 2, 2004

Fitch rates the Alaska Housing Finance Corp.'s (AHFC) housing development bonds, $127.2 million 2004 series A-C, 'AA+'. The bonds are expected to be sold through negotiation next week by a Merrill Lynch & Co. led syndicate. Additionally, Fitch affirms the ratings on outstanding housing development bonds, 2002 series A-C at 'AA+', the 2002 series D and 2000 series A-B at 'AA+/F1+', and the 1999 series A-C bonds and 1997 series A-C bonds at 'AA+'.

The bonds are general obligations (GO) of AHFC, rated 'AA+' by Fitch. Although a portion of the bonds is secured by a pledge of mortgage payments from the housing projects, the bonds' rating reflects the primary security provided by the GO debt pledge of AHFC, prior to consideration of any bond insurance.

The bonds are issued pursuant to a general indenture and a supplemental indenture dated Dec. 1, 1991 and Feb. 1, 2004, respectively. The bonds are expected to be insured by MBIA whose insurer financial strength is rated 'AAA' by Fitch. A portion of the 2004 series A-C bond proceeds will be used, within 90 days, to refund a portion of outstanding housing development bonds. Following redemption, the pledge of the loans will be transferred to the 2004 bonds. The remaining portion will be used to refund certain obligations of the corporation including certain expenditures for governmental purpose projects.

AHFC has more than $480 million of high-quality investments in its administrative fund as of Sept. 30, 2003 and a $200 million unused credit facility for corporate purposes.

AHFC's GO debt rating is based on its strong financial position, favorable operational and financial results, successful management track record, and sufficient liquidity and reserves. Credit concerns remain centered on the geographic concentration of the AHFC's loan portfolio and the real estate market's vulnerability to the state's oil-dependent economy.