Fitch Rates New Mexico Finance Authority's $34.9MM Sub PPRF Revs 'AA-'.
The ratings on the NMFA's PPRF bonds are based on the NMFA's continuing record of conservative loan underwriting criteria, the revenue securing the bonds, the diversification of the loan portfolios and the sound management of PPRF loan programs. The senior bonds are secured by municipal and state agency loan repayments, as well as NMFA's 75% share of New Mexico governmental gross receipts tax (GGRT) revenues. Pledged loan repayments and GGRT revenue currently provide 1.4 times (x) maximum annual debt service (MADS) coverage for the senior lien PPRF bonds.
The subordinate lien bonds are secured by the repayments of its separate loan portfolios, the excess cash flows from the senior lien bonds and repayments from a smaller portfolio of direct loans. This cash flow stream currently provides 2.3x MADS coverage on the subordinate bonds, although coverage is expected to decline with future debt issuance.
Proceeds from both senior and subordinate bonds are made to local governments throughout the state of New Mexico, many of which are small and do not have public credit ratings. To date however, there have been no uncured defaults by any of the borrowers in the NMFA's loan portfolios. Both the senior and subordinate liens are subject to an additional bonds test that conservatively discounts historical GGRT receipts and projected pledged revenues based on the credit quality of the loans; this provides protection against the programs becoming overleveraged.
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|Date:||Jan 11, 2007|
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