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RIVERSIDE COUNTY HOUSING AUTHORITY (CALIF.) '89 REVENUE BONDS 'BBB' AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --

 RIVERSIDE COUNTY HOUSING AUTHORITY (CALIF.) '89 REVENUE BONDS 'BBB'
 AFFIRMED BY FITCH -- FITCH FINANCIAL WIRE --
 NEW YORK, July 8 /PRNewswire/ -- The "BBB" rating on Riverside County Housing Authority, Calif.'s approximately $9 million outstanding revenue bonds, Issue A of 1989, is affirmed by Fitch. The credit trend is uncertain.
 The bonds were issued to finance the acquisition and rehabilitation of a 156-unit multifamily development in the city of Riverside and are secured by the project's gross rental revenues and the annual housing set-aside tax increment revenues from the city's airport redevelopment district.
 Although the authority has made significant strides in reconditioning this previously troubled project, its acquisition, rehabilitation, and lease-up period has extended well beyond the original timetable. Consequently, occupancy rates and net rental cash flow have fallen short of initial projections. The authority has drawn extensively on the city redevelopment agency's annual housing set-aside funds, pledged as additional security to the bonds, to supplement rental revenues used to pay debt service. The authority has also relied on its own resources to meet cash flow requirements.
 Mitigating these concerns is the authority's accomplishment of gaining control over 100 percent of the units, thereby assuring entitlement to the maximum $2,000 per unit annual housing set-aside pledge of tax increment revenues, and the steady, albeit delayed, monthly increase in occupancy the project has been experiencing. The authority's favorable administrative capabilities, experience with other rehabilitation projects, and willingness to lend financial support to the project are also positive credit factors.
 The uncertain credit trend reflects both positive and negative factors. By attaining control over all the units and reaching a current occupancy rate of 70 percent, the authority has lessened much of the original credit risk associated with the bond financing, including payment of nonasset bonds. However, the project remains exposed to ongoing financial vulnerability until a stabilized occupancy of 85 percent or more can be achieved to provide a comfortable cushion of debt service coverage. Increasing debt service requirements beginning in 1995 will add to the financial strain. The authority's willingness to lend financial support is restrained by its limited financial resources.
 -0- 7/8/92
 /CONTACT: Vincent J. Barberio of Fitch, 212-908-0505/ CO: Riverside County Housing Authority ST: California IN: SU: RTG


GK -- NY039 -- 7404 07/08/92 12:18 EDT
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Publication:PR Newswire
Date:Jul 8, 1992
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