The 'AAA' rating on Washington State Housing Finance Commission's multifamily housing revenue bonds reflects: Pledged assets consisting of 'AAA/A-1+' rated investments and a GNMA permanent loan certificate (PLC) to be delivered by Dec. 31, 2000; Coverage of all credit shortfalls and liquidity shortfalls--negative arbitrage, the 30-day payment lag, reinvestment risk, and payment of GNMA accrued interest--from bankruptcy-proof funds on deposit with the trustee; and Cash flows demonstrating sufficient investment earnings and mortgage revenues passed through under the GNMA security to make all scheduled debt service payments and pay all required fees and expenses. GNMA-guaranteed mortgage-backed securities (PLCs) are guaranteed by the full faith and credit of the U.S. government as to timely payment of interest and principal on the underlying
