Fitch Rates Alaska Housing's 2004 Series D Bonds 'AA+'.

NEW YORK -- Fitch rates the Alaska Housing Finance Corp.'s (AHFC) housing development bonds, $106.7 million 2004 series D, 'AA+'. The bonds are expected to be sold through negotiation this week by a Bear, Stearns & Co. Inc. led syndicate. In addition, Fitch affirms the ratings on $342.4 million outstanding housing development bonds as follows,

-- 2004 series A-C and 2002 series A-C at 'AA+';

-- 2002 series D and 2000 series A-B at 'AA+/F1+';

-- 1999 series A-C bonds and 1997 series A-C bonds at 'AA+'.

The bonds are general obligations (GOs) of the corporation, rated 'AA+' by Fitch. Although the bonds are secured by a pledge of mortgage loan payments from the residential housing and amenities being developed as phase II on Elmendorf Air Force Base, the bonds' rating reflects the primary security provided by the GO debt pledge of the corporation, 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 Dec. 1, 2004, respectively. The bonds are expected to be insured by MBIA Insurance Corporation, whose insurer financial strength is rated 'AAA' by Fitch.

AHFC had more than $322 million of high-quality investments in its administrative fund as of Aug. 31, 2004 and a $200 million unused credit facility for corporate purposes.

The corporation'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.