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S&P Upgrades Chicago Housing Agency

JAN 16, 2013 12:51pm ET

Standard & Poor's last week raised the Chicago Housing Authority's issuer credit rating one notch to AA following criteria changes.

The agency also raised its long-term rating on the CHA's $25 million taxable revenue bonds from a 2010 issue one notch to AA. They are special obligations of the CHA backed by its full faith and credit.

"The upgrade is due to recent changes in our criteria," said Standard & Poor's analyst Ki Beom K. Park.

The rating reflects the CHA's extremely strong overall management and a strategic plan that supports the authority's mission, its stable net operating income and cash operations, extremely strong debt and liquidity profile, and top-tier profitability among rated U.S. public housing authorities.

Challenges include a heavy reliance on government subsidies as a major source of income, which are subject to the risk of annual congressional appropriations for public housing and significant reductions of late of federal funding operating fund subsidies and the capital fund grants.

The CHA is the third-largest public housing authority in the nation. It provides 18,325 public housing units and 37,681 housing choice vouchers.