38 National Public Finance Guarantee Corp-Backed Short-Term VRDO Ratings Lowered To 'A-2'; Still On Watch Developing

NEW YORK (Standard&Poor's) May 6, 2009--Standard&Poor's Ratings Services lowered the short-term ratings on 38 municipal variable-rate demand obligations (VRDOs) (listed below) that are insured by National Public Finance Guarantee Corp. (NPFGC; AA-/Watch Dev/--) to 'A-2' as a result of our rating actions on MBIA Insurance Corp.'s (BBB+/Negative/--) counterparty credit and financial strength ratings (Please see "MBIA Insurance Corp. Ratings Lowered To 'BBB+'; MBIA Insurance Corp. of Illinois Downgraded To 'AA-'," published Feb. 18, 2009, on RatingsDirect). The ratings remain on CreditWatch with developing implications, where they were placed March 17, 2009. Although all of MBIA's policies insuring municipal entities were transferred to NPFGC, the terms of the related standby bond purchase agreements (SBPA) for these transactions

...for that credit risk is 'A-2'. SBPAs are provided by financial institutions to provide liquidity support in the case of a failed remarketing of the bonds as a result of optional or mandatory tenders. Issue Description To From ##-/Watch Dev/A-2 ##-/Watch Dev/A-1 Albuquerque, New Mexico affordable housing project refunding variable rate demand bonds series 2000 (MBIA) (National) California Health Facilities Financing Authority (Southern California Presbyterian Homes) Cobb-Marietta Coliseum & Exhibit Hall Authority, Georgia junior lien (MBIA) Hamilton County, Ohio (Health Alliance of Greater Cincinnati) variable rate demand bonds series 1997A series 1997B series 1997E series 1997F Indianapolis Local Public Improvement Bond Bank, Indiana taxable special program variable rate demand bonds (MBIA) Maryland Health and Higher Educational Facilities Authority (Loyola College In Maryland) revenue bonds series 1996B New Jersey Housing & Mortgage Finance Agency multifamily revenue bonds variable rate...

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