Rev Bonds Placed on CreditWatch

The triple-A ratings on two series of mortgage revenue bonds issued by the Prince Georges County [Md.] Housing Authority have been placed on CreditWatch with negative implications by Standard & Poor's.The affected bonds are the authority's mortgage revenue refunding bonds (GNMA collateralized; Regent Street Station), Series 1993A and its taxable mortgage revenue refunding bonds (GNMA collateralized; Regent Street Station), Series 1993B. The actions stemmed from the fact that the successor trustee, the Bank of New York, did not have sufficient funds set aside to carry out the July 29 scheduled redemption of all outstanding bonds, S&P said. "Although the trustee does not currently have the funds, the bank expects to be able to provide the funds or obtain the monies through another source," the rating agency said. The redemption is the result of a mortgagor default on the mortgage note, which caused a prepayment of the Ginnie Mae security. S&P said the proceeds from the Ginnie Mae security were not used to redeem bonds, as provided for in the trust indenture, but were reinvested at a rate below the bonds' true interest cost. S&P's website address is http://www.ratings.standardpoor.com.