DeKalb County Housing Authority's $12.6 million multifamily housing bonds series 1996A and the $1.3 million series 1996C have been downgraded to BB and B from BBB and BB.
At the same time, the New York-based rating agency raised suburban Alpharetta, GA's $52 million general obligation debt to AA+ from AA and also assigned its AA+ rating to the city's $13.19 million general obligation refunding bonds.
In DeKalb County, S&P says "the outlook is negative" on the bonds covering two affordable housing projects, Regency I, 85% occupied, and Regency II, 87% leased. The downgrades came after the housing authority's trustee used debt service reserve funds for each series to make the Jan. 1, 2003 debt service payment on the bonds, S&P says in a prepared statement by analysts Ryan Fitzpatrick in New York and Lawrence Witte in San Francisco.
The trustee also didn't make mandatory sinking fund payments due Jan. 1. The lowered rating also followed the "continued weakness of senior and subordinate debt service coverage ratios at 1.32x and 1.19x respectively, and low occupancy rates" at Regency I and Regency II apartments, according to the S&P analysts.
Alpharetta's positive report card "reflects an affluent, primarily residential community that benefits from access to the greater Atlanta metropolitan employment base; a strong financial position; and a moderate debt burden, coupled with rapid amortization and manageable capital needs," S&P says.
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