S&P Rts ABAG,CA Rev Bnds(Central Park Apartments)'A'.

NEW YORK--(BUSINESS WIRE)--July 14, 1998--Standard & Poor's today assigned its single-'A' rating to the Association of Bay Area Governments, Calif.'s multifamily housing revenue bonds (Central Park Apartments) series 1998A. The bonds are scheduled to sell July 20, 1998.

The rating reflects: -- A well-maintained senior citizens project with a deeply affordable and competitive rental structure;

-- Feasibility of the project's transition plan to an unsubsidized project from a Section 8-subsidized project;

-- An exceedingly robust San Francisco Bay Peninsula economy centered around high technology;

-- Exceptional project ownership by MP Central Park Associates LP (MPCPA)and management by Mid-Peninsula Housing Management Corp. Inc., a wholly controlled subsidiary of Mid-Peninsula Housing Coalition (MPHC)

-- Debt service coverage of 1.50 times (x); -- A fully funded debt service reserve along with an adequately sized operating reserve for potential shortfalls during the project's transition period; and

-- A legal structure that includes a gross revenue pledge and an effective first mortgage lien on the property.

MPCPA will use bond proceeds, low income housing tax credit equity, and deferred loans from the city of Mountain View to acquire and rehabilitate the project, and fund reserves. Central Park's Section 8 housing assistance payments contract expired June 28, 1998. Subsequent to this date, MPCPA expects that units will continue to be subsidized through Section 8 certificates. In the event that federal subsidies are unavailable for Central Park, MPCPA's transition plan should allow the project to successfully convert to unsubsidized status. The plan includes a workable strategy to relocate tenants and, if necessary, use of the operating reserve to cover shortfalls that may arise due to MPCPA's inability to relocate any tenants. Credit quality over the longer term is aided by the project's highly competitive and affordable unsubsidized rental structure and MPHC's exceptionally strong track record as an owner and manager of affordable rental housing.

Central Park consists of 148 revenue-generating one bedroom units, which are nicely built over eight acres. Units are slightly smaller than average, although amenities and unit density are highly competitive with the submarket. The submarket conditions in Mountain View reflect very low vacancies, resulting from steady population growth, high wealth levels, and limited new construction of affordable rental housing.

OUTLOOK: STABLE

Central Park's performance is expected to remain stable based on the overall quality of the project, sound oversight and management by MPHC, and continued demand for affordable rental housing in the project's submarket, Standard & Poor's said. -- CreditWire

Contact: Peter Block, San Francisco (1) 415-765-5044 Pamela Berkowitz, San Francisco (1) 415-765-5012 Copyright 1998, Standard & Poor's Rating Services