Fort Huachuca-Yuma Proving Ground Arizona Communities LLC; Military Housing

S&P Global Ratings lowered its rating on Fort Huachuca-Yuma Proving Ground (YPG) Arizona Communities LLC's series 2009 taxable military-housing revenue bonds three notches to 'BBB+' from 'A+'. The outlook is negative. The rating action reflects our opinion of historically decreasing basic allowance for housing (BAH) revenue, putting continuous strain on net operating project income. This resulted in lower debt service coverage (DSC) we consider commensurate with lower-rated peers. The rating reflects our opinion of the project's: Deteriorating financial performance, primarily reflecting three-year average DSC of 1.14x; Historically large decreases in federally appropriated BAH at both bases; Strong strategy and management, bolstered by experienced ownership and property management, as well as a joint venture with the U.S. Department of Defense (DOD);

...S&P Global Ratings lowered its rating on Fort Huachuca-Yuma Proving Ground (YPG) Arizona Communities LLC's series 2009 taxable military-housing revenue bonds three notches to '###+' from 'A+'. The outlook is negative. The rating action reflects our opinion of historically decreasing basic allowance for housing (BAH) revenue, putting continuous strain on net operating project income. This resulted in lower debt service coverage (DSC) we consider commensurate with lower-rated peers. The rating reflects our opinion of the project's: + Deteriorating financial performance, primarily reflecting three-year average DSC of 1.14x; + Historically large decreases in federally appropriated BAH at both bases; + Strong strategy and management, bolstered by experienced ownership and property management, as well as a joint venture with the U.S. Department of Defense (DOD); + High military essentiality due to the importance of its location for certain U.S. Army testing, including artillery systems, armored...

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