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Rating News -- Moody's Upgrades the Virginia Housing Development Authority's General Obligation Rating to Aa1 from Aa.

NEW YORK--(BUSINESS WIRE)--Oct. 3, 1996--Effective Thursday, the long-term general obligation rating of the Virginia Housing Development Authority (VHDA) has been upgraded to Aa1 from Aa affecting $1.1 billion in outstanding bonds.

VHDA is one of the nation's largest and most sound state housing finance agencies and is now the only state HFA to receive a Moody's Aa1 general obligation rating. The Aa1 rating is based on the following credit factors that combine to provide very high bondholder security:

-- Strong debt service coverage provided by the net earnings on the authority's sizable unrestricted General Fund provides high quality bondholder security. The availability and magnitude of the VHDA's other unrestricted financial resources from outstanding bond programs provide additional comfort.

-- The VHDA's successful operational and debt management track record, proven financial and program management abilities, and sound investment practices are also important credit considerations in the evaluation of the authority's general obligation pledge and combine to provide additional bondholder security.

-- The strong financial performance of both the multi-family and single family programs enhance cash flow and fund balances and provide strong support for the overall security of the general obligation pledge. The strong underlying performance of the individual bond programs reduces the likelihood of a drain on the authority's general obligation assets and enhances credit quality.

The following general obligation bonds are affected by the rating upgrade: -0-
--------------------------------------------------------------------
 Debt
 Outstanding
Program Rating June 30, 1996
---------------------------------------------------------------------
Multi-Family Housing
 Bonds Aa1(revised from Aa) $921.2 million
Multi-Family Mortgage
 Bonds Aa1 (revised from Aa) 138.9 million
VHDA Building Bonds Aa1(revised from Aa) 19.7 million
VHDA General Purpose
 Bonds Aa1 (revised from Aa) 29.1 million
----------------------------------------------------------------------


-0-

The ratings on the Commonwealth Mortgage Bonds (Aa1), Residential Mortgage Bonds (Aaa), and the Multi-Family Mortgage Purchase Bonds, Series 1973A (Aa) remain unchanged.

CONTACT: Moody's Investor Service

Kelly A. O'Brien

Senior Analyst

212/553-4456

or

Florence Zeman

Vice President/Supervisor

212/553-4836

or

William deSante

Vice President/Managing Director

212/553-0353
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Publication:Business Wire
Date:Oct 3, 1996
Words:328
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