S&P Asgns RI Hsg&Mtg Fin Issuer Credit Rating AA-.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 8/10/98-- Standard & Poor's today assigned its double-'A'-minus issuer credit rating to Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. Housing and Mortgage Finance Corp. The corporation's financial performance has been stable to slightly increasing over the five-year period ended June 30, 1997. In the past few years, the Years, The the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109] See : Time corporation has taken on new responsibilities such as servicing to help augment aug·ment v. aug·ment·ed, aug·ment·ing, aug·ments v.tr. 1. To make (something already developed or well under way) greater, as in size, extent, or quantity: traditional sources of revenue. In addition, starting in January 1998, the corporation began direct origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real of mortgage loans. By originating loans directly, the corporation has been able to achieve lower costs of mortgage loan acquisition and obtain higher quality loans. The corporation's profitability ratios Profitability ratios Ratios that focus on how well a firm is performing. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment. all show four-year upward trends. The corporation originates approximately one-third of its loans as step-coupon loans. The program enables borrowers to afford to buy homes when other programs simply do not exist or are not available to borrowers due to income constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. . The step-rate loans slightly reduce profitability since they bear interest at rates lower than their standard fixed rate loans. However, due to efficient operations and low cost production, the profitability figures are still competitive with that of other rated housing finance agencies. The corporation has been very conservative in setting aside reserves for potential loan losses. For the last four years, the ratio of reserves as a percentage of loans has increased sharply and for the last two years their ratio of reserves to total loans has exceeded the average rate for all rated housing finance agencies. Likewise, total equity to total assets and equity plus reserves to total loans have increased the last three years. There are two challenges that the corporation will continue to face, with respect to financial performance. First, a portion of the corporation's current revenue stream will dissipate dis·si·pate v. dis·si·pat·ed, dis·si·pat·ing, dis·si·pates v.tr. 1. To drive away; disperse. 2. over the next 10 years. Currently, the corporation earns revenues as a result of Section 8 administration fees. As these loans reach 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. ) expiration EXPIRATION. Cessation; end. As, the expiration of, a lease, of a contract, or statute. 2. In general, the expiration of a contract puts an end to all the engagements of the parties, except to those which arise from the non- fulfillment of obligations created , the corporation will no longer collect these revenues and will therefore need to find alternate revenue sources to fund their program initiatives. Second, the state has transferred certain programs to the corporation and also has used corporation funds to help defray de·fray tr.v. de·frayed, de·fray·ing, de·frays To undertake the payment of (costs or expenses); pay. [French défrayer, from Old French desfrayer : des-, the cost of certain state programs. Future payments and policies will need to be monitored to ensure that they do not affect the corporation's ability to fund their own initiatives and/or pay debt service on their existing obligations. Newly enacted legislation creating a state-funded housing resources commission should help reduce some of the burdens that the corporation assumed in the past. Economy Rhode Island's rating (double-'A'-minus/Stable) reflects an economy that, although still lagging Lagging Strategy used by a firm to stall payments, normally in response to exchange rate projections. behind the nation, is beginning to show overall improvement, adequate financial position, and high but manageable debt levels after a severe downturn. The Rhode Island economy is progressing through a difficult transition trying to reduce its reliance on manufacturing and increase its focus on services. Over the 10 year period from 1986 to 1996, manufacturing employment decreased by 31% while services employment increased by 33.5%. While the manufacturing employment has decreased significantly, it still represents a large portion of the employment base and will continue to leave the state vulnerable to the extent that it continues to experience losses. The state has successfully lured certain operations of Fidelity Investments Fidelity Investments is a group of privately held companies in the financial services industry. It is made up by two independent but closely cooperating companies, Fidelity Management and Research Corporation (FMR Co. and Fleet Bank. However, finance continues to remain a small portion (6%) of the wage and salary employment and has risen only 0.2% since 1986. Per DRI/McGraw-Hill 1997, the employment mix is led by services 33.2%, followed by trade 22.4%, manufacturing 18.4%, and government 14.0%. Per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. personal income is on par (100.6%) with the nation but only 91.5% of the region. Expected future growth of 4.3% is projected to lag behind both the region and nation. While the unemployment rate of 5.1% is below that of the nation, it is higher than the region. After declining from 1990 to 1996, the population of just under one million will slowly recover as job opportunities improve. The projected 0.3% rate of increase through 2002 ranks forty-eighth among all the states. Overall, the majority of indicators paint a picture of a state that has turned the economic corner -- although sluggishly slug·gish adj. 1. Displaying little movement or activity; slow; inactive: a sluggish stream; sluggish growth. 2. Lacking alertness, vigor, or energy; inert or indolent. 3. . Legislative Mandate The corporation was created in 1973 as a public corporation and instrumentality Instrumentality Notes issued by a federal agency whose obligations are guaranteed by the full-faith-and-credit of the government, even though the agency's responsibilities are not necessarily those of the US government. , and an agency of the state but does not constitute a department of state government. Under the 1973 Act, the purpose of the corporation is to encourage the investment of private capital for the purpose construction and rehabilitation rehabilitation: see physical therapy. of housing for people of low and moderate income and to make provision for the financing of mortgage loans to accomplish its purposes. The powers of the corporation are vested in seven commissioners who are experienced in all aspects of housing design, development, finance, management and state and municipal finance. The appointed members serve for terms of four years and until they are reappointed or their respective successors are appointed and qualified. The corporation is very active and works with the state to provide various programs to help develop the supply of affordable housing within the state. These programs include the administration of the state's Rental Assistance Program and the funding and administration of approximately 200 multifamily loans Multifamily loans Loans usually represented by conventional mortgages on multi-family rental apartments. throughout the state. The corporation has won several awards for its efforts in providing housing within the state. The corporation is very active in funding social programs in addition to housing. The three largest of the social programs are the youth activity program, a senior health assistance program, and support to non-profit housing Non-profit housing is owned and managed by private non-profit groups such as churches, ethnocultural communities or by governments. Non-profit housing uses private funding and government subsidies to support a rent-geared-to-income program for low-income tenants. agency. The corporation maintains a good relationship with the state and representatives of the state have expressed the importance of maintaining and increasing the availability of affordable housing within the state. Management The corporation is managed by a senior staff of nine professionals with an average tenure in excess of eight years. The corporation's business is operated under four departments -- homeownership opportunity, housing management, housing policy and development and staff operations. Management reporting and controls are in place to ensure that each department is adequately monitored against their targeted goals. The corporation's management is prudent in its decision making, as is evidenced by the types of loans the corporation finances and its financial performance to date. Management is also very proactive in guiding the corporation's direction and development -- examples include the fact that the corporation was one of the first housing finance agency to start servicing and originating loans in-house. The corporation has a very strong asset management team that is led by an individual who has been with the corporation for over 20 years. While many housing finance agencies can claim that they visit every property annually, they are one of few agencies that inspect every unit each year. The corporation is very proactive in making sure that all units meet -- and exceed -- regulatory requirements Regulatory requirements are part of the process of drug discovery and drug development. Regulatory requirements describe what is necessary for a new drug to be approved for marketing in any particular country. . This approach helps the agency achieve consistent occupancy at or near 100% for all of their properties, Standard & Poor's said. - CreditWire
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