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Florida Housing Finance bond purchase agreement suspended by Depfa
By Angela McDaniels
Tacoma, Wash., Oct. 7 - Florida Housing Finance Corp. said that Depfa Bank, plc has stopped buying bonds under its standby bond purchase agreement with the agency for its series 1993A affordable housing guarantee revenue bonds and series 1999A affordable housing guarantee revenue bonds.
The bank issued a notice of suspension on Sept. 30 after Standard & Poor's downgraded the rating of MBIA Insurance Corp. - which insures the bonds - to BB+ from BBB. The agreement will be permanently terminated if the agency is unable to cure the suspension within 120 days.
Florida Housing said it is actively attempting to cure the suspension and noted to Depfa Bank that the bonds are reinsured by National Public Finance Guarantee Corp., which continues to have an investment-grade rating of A form S&P.
As previously reported, the bonds may be optionally tendered by bondholders on a weekly basis.
In the past, the purchase price has been payable from funds drawn under the company's liquidity facility. However, the liquidity provider suspended its commitments under the liquidity agreements following the downgrade of MBIA.
As a result of the suspension, Florida Housing said on Oct. 5 that it planned to acquire up to $49 million of the series 1993A bonds and up to $46.25 million of the series 1999A bonds in one or more transactions, either directly from investors in the open market, from liquidity banks or as a purchaser in a remarketing of the bonds.
The agency submitted a draw request to Depfa Bank under the bond purchase agreement on Oct. 6, which was denied.
Questions may be directed to chief financial officer Barbara Goltz (850 488-4197 or Barbara.Goltz@floridahousing.org).
Florida Housing Finance is located in Tallahassee, Fla.
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