Fitch Releases U.S. State Housing Finance Agencies 2007 Statistical Report; New Report Features.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- 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. has updated its state housing finance agencies (SHFAs) statistical information report to include fiscal-year (FY) 2007 financial results for 33 SHFAs. Fitch has also included, for the first time, 10-year average calculations for all states in the report, as well as the financial information for the District of Columbia District of Columbia, federal district (2000 pop. 572,059, a 5.7% decrease in population since the 1990 census), 69 sq mi (179 sq km), on the east bank of the Potomac River, coextensive with the city of Washington, D.C. (the capital of the United States). Housing Finance Agency through September 2006. The 10-year averages provide a benchmark by which to compare recent trends, and in most cases, the agencies are currently outperforming historic averages. This is the case for the SHFAs in aggregate with regard to profitability. Median net operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. as a percentage of total revenue increased to 15.5% for the 33 SHFAs in FY2007 compared with 11.1% for the 10-year average. Similarly, net interest spread, at 26.3% is above the 10-year average spread of 22.3%. Aggregate FY2007 results for the 33 SHFAs demonstrate an 11% increase in total assets and 13% increase in total debt from the prior fiscal-year. Despite the increased issuance of debt, the SHFAs also outperformed median debt-to-equity ratios debt-to-equity ratio The relationship between long-term funds provided by creditors and funds provided by owners. A firm's debt-to-equity ratio is calculated by dividing long-term debt by owners' equity. Both items are shown on the balance sheet. . In FY2007, the median debt-to-equity ratio for the 33 SHFAs remained constant from the prior fiscal-year at 5.7 times (x) and below the 10-year average of 7.0x. The FY2007 debt composition includes a greater percentage of fixed-rate, as the amount of variable-rate debt outstanding for the 33 SHFAs declined to 26.4% from 31.3% for those same 33 agencies in the prior fiscal-year. Of the variable-rate debt outstanding for the 33 SHFAs, a greater percentage (77.5% in FY2007 compared with 68.1% in FY2006) is hedged with interest rate swap Interest Rate Swap A deal between banks or companies where borrowers switch floating-rate loans for fixed rate loans in another country. These can be either the same or different currencies. or cap contracts, thereby minimizing variable-rate exposure. The period of SHFA SHFA Sydney Harbour Foreshore Authority (Australia) growth in assets and debt, which started in FY2005, follows two prior years of decline in FYs 2003 and 2004 during which the agencies experienced rapid prepayments due to low interest-rates. As a result of the prepayments, and subsequent new origination, the SHFAs' active single-family indentures contain relatively unseasoned loan portfolios, heavily weighted to the past three years of loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. . While this relative lack of seasoning is mitigated somewhat by the accelerated home price appreciation over the same period (which has the potential to reduce net loss amounts), it remains to be seen how the current volatility in the residential loan market may impact SHFA single pools. Fitch also notes that in some cases these portfolios contain, in addition to the standard 30-year fixed-rate mortgage, a small proportion of new loan products with minimal performance history such as interest-only and 40-year amortizing loans. However, these products require full loan documentation and have fixed-rate, rather than adjustable-rate, payments throughout the term of the loan. Overall, the 2007 financial results for the 33 agencies reflect an environment in which the SHFAs saw continued strong demand for their mortgage product as competition from other mortgage lenders declined. The SHFAs were able to achieve close to full spread on mortgage rates. At the same time, with short-term investment rates close to tax-exempt bond Tax-exempt bond A bond usually issued by municipal, county, or state governments whose interest payments are not subject to federal and, in some cases, state and local income tax. tax-exempt bond See municipal bond. rates and loan origination occurring rapidly, the SHFAs were also able to avoid significant losses from negative arbitrage while continuing to build their mortgage portfolios and outperform 10-year historical averages. The next one to two years may test some of the resiliency of the SHFA portfolios given the current downturn in the U.S. housing and mortgage markets. But in aggregate, the SHFAs currently have the benefit of a sound financial base. The report titled 'State Housing Finance Agencies: Statistical Information' dated Jan. 18, 2008, is available on the Fitch Ratings web site at www.fitchratings.com. 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. 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