S&P: Minneapolis Community Development Agency, MN Rating Outlook Revised To Stable From Positive On Reduced Debt Coverage

S&P Global Ratings revised the outlook on its 'A' rating on Minneapolis Community Development Agency (CDA), Minn.'s series 1999 mortgage revenue bonds, issued for the Riverside Homes project, to stable from positive and affirmed the rating.

This transaction benefits from a $160,000-a-year general obligation pledge from Minneapolis to make up project shortfalls. In prior reviews, S&P Global Ratings incorrectly applied the credit against max annual debt service, which caused debt service coverage to inflate.

"If the project were to continue to operate with high occupancy and if debt service coverage were to improve, we could raise the rating," said S&P Global Ratings credit analyst John Mante. "If expenses were to increase or if income were to decline, reducing income available for debt service, leading to decreased debt service coverage, we could lower the rating."

The stable outlook reflects S&P Global Ratings' opinion of the project's strong financial performance, high occupancy, and fully funded debt-service-reserve fund.

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