Summary: Fort Benning Family Communities LLC, Georgia; Military Housing

S&P Global Ratings lowered its long-term rating and underlying rating (SPUR) to 'BBB+ (sf)' from 'A (sf)' on Fort Benning Family Communities LLC, Ga.'s series 2006 taxable military housing revenue bonds, class III. At the same time, S&P Global Ratings affirmed its 'AA- (sf)' rating on the project's class I bonds and its 'A+ (sf)' rating on the project's class II bonds. The outlook on all ratings is stable. The lowered rating on the class III bonds reflects our view of the below-90% occupancy level for fiscal 2017 and the large declines in basic allowance for housing (BAH) in 2015 and 2016 that affected fiscal 2016 and 2017 as new tenants received the lower rates. While fiscal 2017 class III

...S&P Global Ratings lowered its long-term rating and underlying rating (SPUR) to '###+ (sf)' from 'A (sf)' on Fort Benning Family Communities LLC, Ga.'s series 2006 taxable military housing revenue bonds, class III. At the same time, S&P Global Ratings affirmed its '##- (sf)' rating on the project's class I bonds and its 'A+ (sf)' rating on the project's class II bonds. The outlook on all ratings is stable. The lowered rating on the class III bonds reflects our view of the below-90% occupancy level for fiscal 2017 and the large declines in basic allowance for housing (BAH) in 2015 and 2016 that affected fiscal 2016 and 2017 as new tenants received the lower rates. While fiscal 2017 class III debt service coverage (DSC) improved slightly from fiscal 2016, the three-year average is right at 1.10x; any level below this could lead to a rating cap of '##+', per our criteria. The ratings reflect our view of: + Fiscal 2017 annual DSC of 2.14x, 1.51x, and 1.14x on the class I, II, and III bonds,...

Summary